Financial Advice for Teenagers

One of the most important things that you must learn as you become an adult is how to manage your finances efficiently. Unfortunately, these skills are almost never taught in school. Therefore, teens rarely have an opportunity to practice creating a budget, saving money and sticking to a financial plan. In addition, credit card companies tend to target college-bound teens, which could potentially result in mounting debt.

What Teens Need To Know About Money

The first thing that teenagers need to learn about finances is the importance of setting goals. When you get a paycheck from an after school job, babysitting jobs or a weekly allowance, put at least ten percent in a savings account with a satisfactory interest rate.

A good initial goal is to save a thousand dollars for future investments. This is an excellent way to learn to visualize goals and calculate returns.

Learn How to Budget As Soon As Possible

It is important for teenagers to understand the importance of budgeting money. These days, most teens are tempted to buy now and worry about everything else later, believing that mom and dad will bail them out if they get into financial trouble.

Most parents will pay for gas money and credit card bills as a way of protecting their children. Although this is admirable, it is best to learn from your own mistakes as opposed to always relying on your parents to solve your money problems.

Take the time to create a budget and commit to it. If you go over your budget, resist the urge to g crawling to mom and dad for help. Sometimes you may have to miss a trip to the movies with your friends or pass on the purchase of new clothes until your budget is back in balance, but when all is said and done, you will be glad you did.

No matter what, always be sure to discuss finances with your parents openly and honestly. You are going to make a few mistakes every once in a while, but you will benefit from the evaluation of such mistakes. Financial responsibility is something that so many adults have trouble maintaining. Therefore, it helps tremendously to start learning about financial planning and management as soon as possible. The good financial habits that you develop as a teenager will stick with you throughout your entire life. When you learn about finances early you will be able to use that knowledge to ensure you are on your way to a financially stress free life.