Let’s face it, many teens today have no idea how to save or invest their money. Considering how many adults currently live in financial turmoil, it’s not hard to see why teens and young adults seem clueless to the benefits of saving versus spending. Like so many things, however, it’s silly to think that teens will regulate themselves when it comes to spending, and that’s why it’s so important for parents to encourage great spending habits when talking to their teens.
Turn Your Eye To Your Own Habits
Like anything else, spending is a habit that is directly affected by what your child sees you doing on a regular basis. If your family is living paycheck to paycheck, identify your own spending problems and approach your teen with humility and bluntness. Tell them exactly what you feel you’ve done wrong, and suggest that you work together to create a realistic budget that they can see in motion. Honesty is one of the best tactics in talking to teens.
Identify A Savings Percentage
When you’re budgeting with a teen, it can be hard to convince them of the virtues of saving their money, especially when they’re experiencing their first real income. Pick a reasonable percentage off each of their cheques that you would like to see put in a savings account, generally about 20%.
Help your child by talking to them about long term investments such as stocks and bonds, retirement funds, and life insurance. Your teen may think these things are strictly for older people, but you can easily put a stop to that thinking by demonstrating the long term gain in their favour. Early enrolment means more saved, while early purchases of life insurance lead to lower premium payments down the road.
Talk to a Professional
Every parent knows that there are just some things your kids take better from a professional than they will from their mom or dad. Despite knowing that your knowledge is correct, take the time to set up an appointment with a professional financial planner for your child. Just talking with an outside party may be enough to help your teen set long term goals for his or herself. A professional financial planner may help your child visualize his or her first car, first apartment, or even college tuition.
This guest post is from Allison with LifeInsuranceQuotes.org, where you can find financial information about this kind of insurance plan.
I have always been honest with my teens about our financial standing and they are very mature and understanding of the situation. I have instilled the value of saving every penny not only for the rainy day but for the long term. As they grow older, I intend to engrave deeply unto them the concept of forced savings (taking the savings out of the paycheck first before the expenses start). I hope that they will build great savings when they start earning their income later.
Amy recently posted..Power of the Extra Dollar
Hi stopping by from the ultmate blog party.
My mum taught me about the thirds rule. One third in the bank, a third to spend and a third to live on and that has served me well through life.
I love the idea of getting advice from a professional financial advisor. Being a teenager, I can say that it would be easier to develop a budget/strategy with a professional who is potentially much more informed then parents are.
on February 8, 2017 at 10:38 am
I think any time you can teach a child about money and good spending habits this is a plus and will benefit them later in life.