Teenagers are notorious for spending money recklessly. In fact, many financial experts believe that teenagers are the most impulsive shoppers out there. If you have a teenager at home, you know exactly what we’re talking about. One of the best things you can do for your teenager is to teach them how to save money. Saving money is a valuable life skill that will serve them well into adulthood.
Here are five tips to help you teach your teenager how to save money.
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1. A Bank Account is Crucial
If your teen doesn’t have a bank account already, now is the time to open one. Instead of giving them a credit card, help them open a checking and savings account. After opening a bank account, they can also get a debit card. A debit card allows them to spend money that they already have in their account. This is a great way for your teen to get used to using plastic instead of cash. And unlike a credit card, a debit card won’t allow them to spend money they don’t have.
2. Encourage Them to Have a Savings Mindset
There are two types of teens when it comes to money – savers and spenders. It’s important to encourage your teen to be a saver. This means that they should be thinking about ways to save money instead of ways to spend it. One way to do this is to have them set savings goals. For example, they may want to save up for a car, a new bike, or a trip to Europe. Help them figure out how much money they will need to save and when they would like to reach their goal. This will help them focus on saving money instead of spending it.
3. Help Them Make a Budget
Another crucial step in teaching your teen how to save money is to help them make a budget. This will ensure that they are aware of all of their expenses. Once they know how much money they have coming in and going out, they can start to make adjustments to save money. For example, they may want to cut back on eating out or shopping for clothes. By budgeting, your teen will learn how to live within their means.
4. Provide Savings Incentives
An incentive is another excellent way to encourage your teen to save money. For example, you may want to match whatever they save. So, if they save $50, you will add $50 to their savings. Don’t give them the money outright – let them know that they have to save it first. This will show them that their efforts are worth it and that you are supportive of their goals.
5. Lead by Example
Finally, remember that you are the best role model for your teen when it comes to saving money. If you are always spending money recklessly, they will likely do the same. Instead, be a good example and show them how to save money. This includes setting your own savings goals and sticking to a budget. If you can do it, they can too!
Your teenager doesn’t have to be a spendthrift. By following these tips, you can teach them how to save money. The earlier they learn, the better off they will be financially in the long run.
Resources:
https://current.com/benefits/teen-banking/
https://www.investopedia.com/personal-finance/10-tips-teach-your-child-save/
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