It’s never too early to teach your kids how to better manage their money. After all, although your youngsters will learn a lot of valuable things in school, skills like how to manage cash and afford debt are often missing from the curriculum.
That means that it’s up to us as parents to not only give our kids a good role model to look up to, but also provide them with some helpful advice on how they should be using their money going forward. If you want to set your teenager up for success in the years to come, here are some hacks for you.
First things first, it’s important to get your teen into the right mindset when it comes to how and when they choose to spend their money. It’s easy to tell yourself that the best way to make sure that your teen is prepared is to ask them to save every penny that they earn, just in case. However, that’s not a realistic way to live.
Instead of trying to get your teenager to give up on their spending habits completely, ask them to think more carefully about the value that they’re getting back from their investments. For instance, spending a whole month’s wages on a new game might give some short term pleasure, but in the long term, it means your teen is sat at home, unable to go out with friends. On the other hand, taking out a personal loan so that your teen can afford a car to go to his or her new job means that they have more money and opportunities in the long term.
Budgeting is at the heart of any good financial strategy. Unfortunately, many of us don’t know how to make the most of our budget until much later in life. If you can give your teenagers some insights on how to get started with a budget of their own, you might find that they’re more likely to get into the habit of watching what they spend and reducing their output in certain areas.
Sit down with your teen and show them the strategy that you use for budgeting your own cash. This might be the envelope method, or you might use the 50/30/20 method, where you spend 50% on bills, 30% on the things that you want, and 20% on your saving. Whatever works for you, share it with your teen, and encourage them to go out and find their own solutions too.
You can nurture a passion for bargain hunting in your kid from virtually any age. When they’re young, you can send them on scavenger hunts at the supermarket, looking for items that have a lower price than whatever you’ve written on your list. When they’re teenagers, you can help them to track down the items that they want to buy online by comparing prices from different companies, or even using apps to apply automatic discount codes to their spend.
Nurturing a habit for seeking out a bargain is a great way to make sure that your youngster never pays any more than they need to on anything. As they continue to grow, this need to search for better and bigger deals will stick with them. A frugal lifestyle always comes in handy – no matter where your kid ends up in life.
Finally, there will be times that despite their best saving habits, your teens run out of money and need some extra help to buy things like clothes and games. As tempting as it is to reward your teen for their attempts to save, it’s important not to bail them out whenever they want some extra cash. After all, you’re not always going to be there to offer some extra cash when they get older.
Instead, sit down with your teen and help them figure out the best way to find the money they need as quickly as possible, even if this means selling some of their old belongings, or putting some extra hours into their part time job. If you can afford to give your kids some money, consider giving them it in exchange for them doing tasks for you, like cleaning the car or helping you with the garden. This way, they’ll learn that money always comes with a price.