“I wish i knew this before” is something we all have said at least once in our lifetime. be it a financial, educational or any other social situation, we wish our parents or someone had prepared us for it. but life can be cruel and that’s how we learn it. but do we want the same for our kids who will be exploring the real world very soon? nope!
so, as parents, it is your duty to prepare your teenagers to face some challenging situations. there are things that are not in control, but then some things are. finances. yes, the stepping stone of adulthood. all parents want their children to learn the value of money. you want them to be financially independent once they leave the house. how do you do that?
effective money management tips to prepare your teenagers
- start giving teens pocket money or allowances
- help them understand – needs vs wants
- impart the wisdom of budget-making
- educate them about taxes
- encourage part-time job
- introduce them to bills
- educate them on investments
- talk about savings and emergency funds
- start using apps for money management
- teach them about how literally health is wealth
- credit card: boon or bane?
with financial independence comes financial freedom. how do you make sure your teenager knows how to manage money? you, as a parent, guide them. let us look at some easy and best money management tips that you can help your kids with.
1. start giving teens pocket money or allowances
giving your teens pocket money will teach them the basics of saving and monitoring their expenses. you can also help them learn the lesson of earning extra pocket money by working around the house and helping you with chores. yeah, that’s right, make them do those dishes.
2. help them understand – needs vs wants
being a young teenager, there are no financial responsibilities in life. however, at one point, they need to start understanding the difference between a need and a want. this will help make them understand the vast difference between buying a winter jacket and buying a leather fur jacket.
3. impart the wisdom of budget-making
as a parent, you need to know that there are eyes that follow you, there are actions that imitate you. thus, it is wise to inculcate money management habits from a young age by practising what you preach. we can teach them saving and investing all we went, but it will all be in vain unless we teach them how to make a budget. so go ahead, make that budget, list out the savings and stick it on that fridge!
4. educate them about taxes
the schools don’t do it, so you have to. instead of waiting for them to grow up and be all flustered, tell them about the concept of taxes. educate them about the types of taxes and how they can deal with it. honestly, we are better off chilling than filing their taxes for them in the future.
5. encourage part-time job
not everyone feels the need to make their kids do a part-time job. but you need to consider it as a life lesson than a money-making resource. the idea to encourage your teens to get a part-time job is to teach them about accountability and hard work. this will prepare them better for financial achievement in the future.
6. introduce them to bills
show them the regular house bills like electricity, water, grocery, etc. so they know what to expect when they get their financial freedom. involve them in making the house budget. the teenagers will be able to anticipate their expenses and create a budget for them accordingly as they grow up.
7. educate them on investments
young adults might not need to invest right away, but they should be aware about the investment opportunities and options. parents should guide their kids through the know-hows. tell them about the magic of compound interest and how they can start contributing right away for their future.
8. talk about savings and emergency funds
we learn about savings quite late in our lives. before that it is all about seizing the moment and YOLO! but, finance doesn’t always have to be boring. teach your kids how they can still live every moment to the fullest and be financially responsible at the same time. even a nominal contribution to their savings will help them in the future.
9. start using apps for money management
with innumerable apps in the market these days, start using budgeting, monitoring expenses and savings apps to keep everyone in a loop. this will not only create a habit but will also make the young adults a part of the financial responsibilities the family members hold. Some great money managed apps are Splitwise, mTrakr, and Tax Calculator.
10. teach them about how literally health is wealth
with medical expenses peaking these days, your teenagers have to account for those unpredictable expenses in the future. thus, opting for medical insurance is a wise tip for every adult and impressionable teenager out there.
11. credit card: boon or bane?
using credit cards is still a very grey area. it is not suitable for everyone. however, as parents, we shouldn’t disregard that option. instead, we should tell them about the never-ending circle of credit card bills. tell them about the pros and cons. it is advisable to share personal experiences as they can relate to it and make a responsible choice in the future.
these money management tips can be learnt with experience. some bad experiences cannot also be avoided but can be handled. so, it’s better if parents educate them on how to face these experiences. it’s never too late to start your money management lessons, but it’s also never too early. gear up your teens.
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