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According to Fox Business, over 80% of teenagers in the US don’t know how to manage their money. Many of these kids didn’t have the proper financial education to control spending habits or invest in the future. Ironically, parents didn’t realize their children didn’t know. Some even thought the school would teach their son or daughter about taxes, budget, and inflation.
I know what it’s like to be in their shoes. Growing up, I had to learn how to manage my finances and take care of my money. It took many years to get to that point. The problem is that teenagers shouldn’t have to wait that long to learn about money management. Many teenagers want to arm themselves with the right tools for the future. They want to earn an honest living and save enough money to afford a lovely house and lot. To help them out, I’ve come up with three fundamental principles to help them take the initiative and learn more about money management for teens.
Many big-shot gamblers and high-risk earners think they know the tools of the trade. They might understand the numbers game and their chances at a profit. The biggest mistake they make is sticking to their assumptions.
You might also feel this way when discussing finance in general. Teens might think they already have a firm grasp of money management. Adults may believe that they have discovered proven financial tricks to follow. The funny thing is that both instances are wrong. Learning finance and money management for teens should always include an open mind. You might know certain things, like budget and savings, but everyone has a different strategy and opinion.
To learn proper money management for teens, approach your parents and keep an open mind. Never assume that you know everything. Take time to understand their inputs and see their perspective. For example, your mom and dad might think saving money should be a priority. Your friends, however, may care more about investing in stocks. Whatever you can learn about finance, always be a blank slate.
It might be shocking to learn how difficult finance can be. You might see your parents or older siblings flustered when they remember their mistakes. They may have overspent their cash because they didn’t consider the risks. Teens might understand what they could lose.
If you want to learn more about finance, brace yourself for the possibility of, such as tuition or Christmas gifts, a tough life. Your parents might be holding bac want to imagine you having a hard time, especially with your money. Unfortunately, you can’t rely on your parents forever. The sooner you accept the possibility of money problems in your life, the easier it will be to learn from the experts.
For adults and parents, remember that your kids won’t stay with you forever. They’ll eventually fly from the nest to explore their own lives. You can arm them with the proper knowledge of money management ideas and dangers. The sooner you make them aware of what they could lose and how tough it can get, the better. I grew up with a single parent and a brother who dropped out of school to fend for us. Life can be challenging, and you can’t keep your kids hidden from that. However, if you start teaching them now, they’ll be able to protect themselves and build a better future in life and finance.
The statement above might sound cheesy, but I believe confidence is key to all walks of life. Studies show only one out of five parents feel like they are suitable role models for money management. It’s ironic because many kids want to learn from their parents. They want to know how to save money and make better choices with their earnings.
For teens, the key is always believing in yourself. Remember that the stars you adore, from celebrities to millionaires, have stumbled or made poor decisions in the past. Some have accrued heavy debts while others invested in businesses that fizzled out or fell apart. However, these mistakes don’t make them any less skilled or qualified; this also applies to you. Take chances and trust in your decisions. Any mistake you make is a good lesson for the future. Keep your hopes up, and remember to keep moving forward.
For adults and parents, remember that you’ve got the advantage of experience. Your kids will need that to understand how money works. Believe in what you’ve gone through and teach them what they need to know. For example, if you’ve ever gone into debt or used up your savings, tell your children about it. Explain why and how you bounced back or what you’ve learned. Imparting that wisdom will help your kids prepare as they learn about money management.
Now that I’ve covered the fundamental principles of learning money management, it’s time to ask questions. Specifically, I’m talking about what questions teens should ask their parents and loved ones. Here are some vital finance questions you should ask to learn more about money management.
Your parents have lived longer than you by a few years, if not decades. That means they’ve had more time to choose what is worth saving, spending, and investing. That also means they’ve learned what works best for them and what doesn’t. Knowing is the key to success, and there’s no better teacher than failure. For example, your mother regrets not investing in a piece of land that grew in value years later. By talking it out with her, you can learn how valuable your investments now can be in the future.
When you talk about money, ask how much the luxuries in your life cost. Learn from your parents how much money they spend annually to pay off the mortgage for your house or the price of the family car. You’d be surprised how expensive things you take for granted can be. You might not realize it now, but your utilities, from the plumbing to the electricity, require payment. The sooner you realize how much something costs, the more you understand money management. After all, you want to keep your money from disappearing.
Try asking your parents to leave you in charge of the family dinner for practice. Whether or not you cook is up to you. By being given a specific budget and shopping for the ingredients, you’ll understand how to spend your money wisely and perhaps avoid indulging yourself in your favorite meals.
Spending is only part of the equation in finance. Another aspect you need to consider is how you earn and save money. It’s easy to focus only on the salary of the job you’ll want after college or the cash you make at your part-time job. However, if you want to learn how to keep yourself afloat, ask your parents exactly how they paid for the house or other amenities. You might think they paid it off in full, but you’d be surprised how long it could take to pay the mortgage entirely.
In addition, ask your parents if they directly paid it or used savings. By learning what they saved for, you can understand why they put so much importance on one purchase. Once you understand saving and spending, you’ll quickly master the art of money management. For example, people might save up to buy enough large cars for spouses and children to enjoy a road trip.
This question will help you plan out financial strategies in your mind. Your parents may have a different way of looking at expenses and savings. Some like to deduct their monthly purchases and bills from their overall savings. Others might live on a day-to-day financial plan. Whatever approach you take, consult your parents first. They might notice something you overlooked, like bus fares and dating funds. Aside from learning about financing your teenage life, you can also bond with your mom or dad about how they plan out their cash and why.
You’ll have to leave the nest one day to fend for yourself. It’s the natural cycle of life in all things, especially humans. However, you might not realize what your parents can and can’t cover for you on. They may pay for your college education, but they might not have the cash or savings to pay for your new clothes or rent. So before you go into the adult world, ask your parents what they can and can’t cover once you leave. This way, you’ll understand which expenses you can safely go out of your conscience and which you must pay careful attention to.
Money management for teens may sound like an easy subject, but many children do not get enough education about protecting their money. The fastest and easiest way to learn is by asking their parents or guardians how they handle finances. These children must accept that they might not know what they spend and how much things cost. With these topics and questions, you can learn more about how to save money and spend it practically. If you want to hone your money management skills, check out this article to see what activities can help you control your income or allowance.
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