The unfortunate reality is that living has become a more and more expensive matter for today’s young adults. Our children live in a financially different world than we did many years ago. Still, that does not mean that we cannot equip them with the proper tools to guide them as they begin handling their own money.
This means passing on good practices to save money and helping them make full use of the numerous resources available to them in today’s day and age. Some apps let them keep track of their finances and services that help them register for the IRS Fresh Start Program if necessary.
To raise financially literate teens who can confidently deal with money, a good mindset paired with tech-savvy tactics will keep them from living their adult lives deep in debt.
Basic Money Practices to Build
Amidst the different kinds of advice from so many sources, you must instill wise money habits in your teens to make sure they are not easily swayed by the words of just anyone on the internet.
Always start with a plan
Countless financial issues are birthed from a lack of planning. Protect your teens from these mishaps by teaching them how to make a budget ahead of every month.
First, have them write down their defined costs. For teens, this can be money spent on their commutes to and from school or their school lunches. These fixed costs are those they have to spend on per month and whose prices do not change.
Then list variable expenses with the approximate amount that your teen expects them to be. These can include materials for projects, snacks, and the like. When you have an idea of the total cost your teen will incur for the month, you can then help them budget their allowance and salary from a part-time job if they have one.
Do not always “treat yourself”
Don’t get us wrong. We do not mean that your teens should completely deprive themselves of things they enjoy to save money. What we mean is that they should approach the principle of treating themselves wisely.
One way to help your teens accomplish this is by having them tell apart their needs and wants. This way, they know what their priorities are. It allows them to forgo a few luxuries in favor of dealing with the things they need in their daily routine.
It also helps your child rethink the idea of treating themselves. While it is perfectly okay for them to reward themselves with nice things now and then, self-care involves sensitivity to one’s needs and addressing those, even when it is not as exciting as focusing on wants.
Take the time to search for good deals
Patience and resourcefulness take you far in sticking to a budget. Teach your kids to go out of their way to find good deals before making a purchase. You’ll never know; a product sold at regular price in one store could be on sale or bundled with another product in another store.
Encourage your teen to shop when there are big ongoing sales, such as end-of-season sales or Black Friday promos, to get items at an affordable price and to avail coupons and vouchers from authorized websites and apps.
Money Tech to Help Your Teens
Your teens face an advantage today in which they have access to different tools to learn the ropes of money management.
Help demystify the process of filing tax returns by familiarizing your teens with the apps at their disposal. Use tax-filing software that offers tutorials and explanations on tax computations so that they understand how tax works and grow in confidence that they can handle it on their own come time to do so in the future.
Free Credit Report Providers
When your teens start working and planning for their future, they will have to understand their credit score and what they can do to raise it. Checking credit reports is one vital method to do this.
Inform them that they can get one free credit report each annually from the following agencies: TransUnion, Equifax, and Experian. Explain how a thorough review of one’s credit report at different times of the year ensures that your private information is safe and that your finances are correctly accounted for.
Financial education is key to guiding teens on the path to financial independence. When they understand how to handle money and what tools to use to keep them on the right track, your teens can make wise money decisions at a young age.