Teenagers have very limited knowledge and mindset about money. They normally think that money is meant for spending and to satisfy themselves. As much as they know what saving is, they really don’t give it much emphasis.
Teenagers are emotional when it comes to money and finances. Their emotions influence and dictate their decision making because they lack the knowledge. The knowledge of teenagers about money and finances depend on the kind of environment he is living in, the attitude and approach of his parents towards finances, and the things that he hear and see in his environment. In most cases, since money is a medium of exchange, most teenagers think that money is meant for spending.
Teenagers should be taught and realize the value of money and finances. The world is financially illiterate in general as financial education isn’t being taught in schools. Children, teens, and young adults graduate and soon work or engage in business in order to earn but doesn’t know the real value of money thus making them struggle financially no matter how hard they work. There is a dire need of financial literacy and it can be changed by gradually educating the teens about finances. Here are some tips that you can teach teens about finances and money.
1.) Let them realize the importance of saving. People have the mindset of saving and spending it later on. How many times have you notice people save and just spend it later on for something that is not important? How many times have you heard people say that “I am going to save to buy this and that” or “I am going to save for my vacation next year”? People save just to spend and most parents unknowingly instill that to their children’s minds. Instead of telling teens to save in order to buy something, let them realize how important saving is. Instead of telling them to save for a computer, a new dress, or a new pair of shoes, tell them to save as much money as they can so they can have something to use when the need arises. Such training will help them develop a sense of building emergency fund and avoiding debt later on in their lives.
2.) Learn the difference between a want and a need. Needs are those things that we can’t live without such as food, clothing, shelter. Wants are the things that we could live without. Wants are triggered by emotions and needs discipline to control. Notice other people and you’ll realize that they are spending a lot more on their wants than their needs. Help your teen develop discipline by focusing on wants. Such discipline will be very useful for them later on in life. People who spend a lot on unnecessary things are people who didn’t develop discipline while they are still young. Developing discipline is very important during the teenage years because they still don’t have much money in their hands thus if they commit mistakes along the way, the damage is minimal and the things that they spend on are way lesser than the things that adults spend on.
3.) Priorities. Aside from knowing what needs and wants are, teenagers should also learn how to set priorities. Priorities are very important as they normally give the greatest benefit if given the right attention and action. If you teach your teen how to set the right priorities, rest assured that he will develop such habit and bring along him as he age. One of the common traits of very successful people are all about setting the right priorities and focusing on it. When it comes to finances, teach your kid that savings should be a priority over spending because if you save, you will have the money and quality of life to enjoy later on instead of enjoying it all today but for a very short period of time.
4.) Invest in knowledge. Instill in your teenager’s mind that investment is the greatest asset that he could have. Deep knowledge and the right actions will lead to enormous wealth and make him financially independent later on in life. You can make learning as fun as possible by starting it at your home. Playing Robert Kiyosaki’s Cashflow 101 and 202 are among the greatest ways to get you and your teens financial literacy up while not boring yourselves. However, as soon as he start to gain interest, start introducing books about financial management, investments, money, savings, etc. It might sound a lot but if he’s interested, he himself will take the initiative to learn later on. But keep in mind to let his interest on such subject grow first.
5.) Always keep your values checked. Teenagers are very impulsive people and once they see something good for them, they will normally go for it disregarding whether it’s good or bad. When you have money, temptations will be all around. Let your teen realize that he should not give in to temptations and he should always and only do what is right. Make a happy and supporting environment in your home. A happy family makes a very well raised kid or teen. It will not only benefit them financially but also in almost all aspects of their lives. Money is one of the greatest temptations there is and once you have value-oriented teens, the chances of them doing wrong decision when it comes to finances are slim.
Though teenagers are still young when it comes to money matters, it is also the best time on their lives for them to start learning about finances. What teenagers learn and develop early on in their lives are normally the things that they bring when they grow up. If you educate your teen financially, you are most likely going to have a very successful person in the future. A young brain is like a sponge. It keeps everything that it takes so fill it up with great things.