We all know that teenagers live for the day, they don’t worry too much about the future, they think about making many friends, being popular, new conquests, etc.
Those stories were also part of our lives. However, something much more important that we have in common with adolescents of the 21st century is that neither them, nor us, were formally taught to manage our money. That is why we have prepared this article on budget for teenagers and we trust that you are going to love it!
We have a great responsibility as parents to teach our children certain basic principles so that they manage their allowance in a better way.
How do teens learn to budget?
Here are five tips to teach your teens how to manage their money:
(1.- Teach your child to make a budget
with the money he receives through allowances, gifts or any occasional job he has. You must classify your money into three categories: money to save, money to spend, and money to share.
• The money to save is a part of all the money you have received. You must set aside at least 10% for a fund destined for some goal saving, that is, something specific that you want to buy in the future.
It is important to help your child decide where to save his money. There are savings accounts for young people in some financial institutions. As an exercise, invite your child to research options and choose the most suitable account option.
• Spending money is money that you can freely spend. Help your child understand the difference between his needs vs. your wishes to make the best use of it.
• The money to share is a percentage of the total (we suggest 10%) to share with your family, friends or people in need. This practice will build the character of the adolescent and will not allow him to think only of himself.
(2.- Share every opportunity with your child in which family money is spent
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That will bring you closer to knowing the reality of your budget. For example, take him shopping at the market and / or the supermarket, ask him to accompany you to pay for basic services (water, electricity, telephone, internet, cable).
(3.- Teach him to be a great responsible and intelligent buyer and not an emotional one.
For example, if you need to buy an article of clothing for someone in the family, determine the budget for the expense, compare three options of clothing of similar quality and use before buying and try to find offers and discounts for the purchase.
Once you research your options, make the best decision that must balance price, product, brand and quality.
(4.- There is a big difference between I want it, I need it and I can pay for it.
This is the opportunity to teach your children what are the advantages or disadvantages of buying on credit vs. cash. Credit is a good tool for buying durable goods. While buying in cash, although it is true requires saving discipline, sometimes it allows you to get very good discounts.
(5.- This recommendation is the most important of all, because “words teach, but example transforms”.
As much as we teach our children all the four previous recommendations of budget for teenagers, if they do not see that you put these principles of personal finance into practice first in your life, you will not have a greater impact or influence on developing healthy habits for the financial life of your children. .
Remember that when it comes to money management, you play a very important role in influencing the attitudes and customs of your children. Put these tips on budget for teenagers into practice and by the way, you will take better care of your pocket!