We speak with Jon Paradise with Town & Country Federal Credit Union on 5 Money Tips for Teens
You might think teens are too young to think about money management, but these are the best years to learn personal finance best practices and start saving money. It can be overwhelming, so, as we get ready to welcome April, which is Youth Financial Education Month, here are a few simple tips to make it easier for a teen or a teen in your life to get started.
Track your spending
Keeping track of your spending helps to establish a budget and good money habits. Record your expenses and try to categorize them so you know where you are spending most of your money. Does the local coffee shop have your order memorized? Do you make weekly mall runs? Tracking your money doesn’t need to be a time-consuming process.
Shop with friends
Bringing a friend with you helps keep your teen accountable to their budget, especially if they are a notorious over-spender or impulse shopper. And for things like back-to-school shopping, think about items your teen can buy together and split, so they can both save some cash.
Always pay yourself first
When a teen’s paycheck comes in, no matter the amount, have them get in the habit of sending a certain amount directly into savings before they do anything else. Even if it’s a few dollars each week or month, it adds up – especially if they start now and use savings accounts that earn extra interest.
Educate
While things like credit scores, retirement savings and investing may seem like far off financial worries for teens, as we know, they’re closer than you think. While they have the time and their finances are still fairly simple to manage, take the time to teach or have your teen learn about these financial terms and how to set themselves up for success.
Build credit
Credit cards come with great responsibility, and the potential for risky spending habits, but learning how to manage credit cards well can be a make or break for your finances. Consider adding your teen as an authorized user on their credit card or open a starter credit card for them. It’ll help them build credit and learn priceless money management and responsibility skills that prepare them for when they gain access to larger credit limits.
It really is never too early to start cultivating the right spending and saving habits. The best thing you can do is educate your teen and make sure they have the tools needed for success. And repeat these lessons often.
