The very first taste of money you get is probably the sweetest. It is the time when you feel that you have actually gone out and earned what you are paid. For many of us, this first experience happens when we are teenagers. Although different teenagers have different perspectives on the work that they are doing, no one can deny that they like it when they receive their money on payday. The only thing that most teens need help with is planning out how they are going to save some of that money that they have been earning.
Learning to budget your money is the key to being able to save more of it at any stage of life. Recent news reported by CNNMoney and others has shown us that even adults often do not know how to or are not willing to save their money. The majority of Americans have little or no net worth at all. If a teenager is able to learn how to budget his or her money early, then that teenager is much more likely to do better than the majority of Americans in the future. Some teenagers take it upon themselves to save their own money, but most do not. If you are in a position to influence the spending decisions of a teenager, then you will want to strongly encourage them to spend less and save more.
Doing the math
If there is one saving grace to teaching teens about saving, it is that they do not currently have many expenses. Since the majority of a teenager’s expenses are covered by his or her parents, that teen needs only to learn about how to pay for the things that they do have to take care of. For some, this might mean that they have to learn how to budget for the gas they need to drive a car. For most, this means that they will have to figure out how to save for entertainment purposes like hanging out with friends. A teenager can take out a pen and paper to write out a small budget for themselves. Since they are going to be in control of most of the spending that is on that budget, they are going to have more flexibility to save more money than their adult counterparts. At this point, it is just a matter of if the teenager wants to save the money or not.
A change in mentality
Many parents have bought into the myth that you absolutely must provide credit to your teenager. This is simply not the case. It is true that most of the world operates on credit, but that does not mean that you have to get them started on it now. It is more prudent to allow the teenager to make the tough spending versus saving choices without adding in the complication of credit. Remember, your teen now has at least some income from their summer job. He or she should learn to take care of that income responsibly and prepare for things that they will need to spend for in the future. Learning these lessons now will help them to carry them over into their adult life.