These money management tips for teenagers are from Randy Loren – a financial advisor, author, and speaker who specializes in teaching teens about budgets, investing, and saving money.
“As a teenager you are at the last stage in your life when you are happy to hear that the phone is for you.” – Fran Lebowitz.
I’ve never been big on answering the phone — teen or not. But another very cool thing about teenagers is that they’re on the brink of being wildly financially successful, because they’re starting fresh with money! Teens have no debt history to deal with; they just have a bright clean future. Right? For more money info for teens, click on Loren’s book – Climbing the Money Mountain: The Young Adult’s Guide to Reaching Your Financial Peak.
And, here are his seven money management tips for teens…
The biggest mistake teens make about money is wanting instant gratification. Teens want money now, and seem to care less about waiting until supply economics drives the cost down. Take the new iPod phone: it was originally $499 when it came out; now, you can get the phone at ATT for $99. Teens need to begin to balance saving and spending money, because most teens only know about spending it. They have little or no training on saving money for their future or for a rainy day.
7 Money Management Tips for Teens
1. Get your money growing. If you start saving a little each month, your money will grow and grow and grow. The Motley Fool website has an instant calculator that shows how much your savings will be worth over time. Begin saving when you young, with an IRA, Roth IRA, or other type of investment. Let years of compound interest make you wealthy and well prepared for the future.
2. Defer material wants. You don’t always have to be the first to own something new! Wait a little while until the excitement subsides, and then determine if you really wanted it in the first place. A huge money management tip for teens is that we often spend money on stuff, only to realize later that it wasn’t important.
3. Learn to budget. Make a budget to understand and see where your money goes each month. Budget is not a four-letter word. Done well, it is a practice that will enable you to be creative and flexible with your money. It will show you how to decrease financial stress, afford big-ticket items, and make the most of your earnings. Ask a parent for help with this.
4. Invest in your future earning power. Get a good education, because the more education you have, the more skills you process, and the more money you will make, and the less likely you will be unemployed when recessions hits.
5. Start a bank account. Find a no-fee bank in your area. Go with your parent to open up a savings account (with an ATM card) or a checking account (with a debit card). Learn how to record deposits and withdrawals, use the ATM, write checks, use the debit card, and balance your monthly account. At the very least, get a savings account and an ATM card so you’ll have your own gas money.
6. Be a smart consumer. Here’s a money management tip for teens that many adults don’t know: Learn how to negotiate for a better price on goods and services, and how to comparison shop. You can stretch a dollar by being a smart shopper–buying used or factory refurbished items, getting “off” brands, waiting for sales, asking for scratch and dent specials, etc.
7. Be a goal setter — and keeper. The main reason adults get into financial troubles – such as too much debt, no retirement money, no insurance — is because they failed to set and keep their financial goals. Work with a counselor or parent to set career, salary, and lifestyle goals — and then set stepping-stone goals that will help you succeed.
Need a job? Read 25 Odd Jobs and Hobbies That Make Money in Creative Ways.
Do you have any money management tips for teens – or any questions? Comment below!
Randy Loren is motivational speaker in South Florida, who educates high school students about financial literacy and sound money and work practices.