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Financial Experts share Money Management Tips for Teenagers

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The earlier a person can learn to be smart with their finances, the better. If you are the parent or guardian of a teenager, it’s a great idea to start including simple money management lessons into your day-to-day activities. These lessons don’t have to be highly involved and shouldn’t put the youngster under pressure. They just need to be minor changes in lifestyle and behavior that will help your teen to be confident with money. Here are some money management tips for teenagers.

Think Long-Term

It’s important to introduce the young people in your family to simple banking as early as possible. Discuss with them the benefits of savings, interest and good credit. Help them to open a bank account and encourage them to put away a portion of their cash each week. You could also introduce them to savings accounts and set an initial goal for them. This may be to save enough for driving lessons, a new bike or something similar.

Be Smart with Loans

Teenagers should be taught to be smart with loans from an early age. Interest rates and credit should be clearly explained. However, it’s worth them knowing that borrowing can be handy at times. If they’re planning to get a student loan, for example, it’s good for them to learn how repayments are calculated and to understand the concept of debt consolidation and refinancing a student loan to save on education debt. Knowing these basics will make your teen financially aware and prepare them for what’s to come when they leave home to study.

Find Flexible Work

It’s a great idea to inform your teen that if they want luxuries such as new clothes, games or tickets to events, they will need to find a way of paying for those themselves. Some parents or guardians also charge rent once a young person reaches 18 to encourage them to find a means of supporting themselves. Continuing with pocket money for too long can be damaging, as it tends to suggest the possibility of being given something for nothing. It’s a great idea to encourage a teen to get a flexible evening or weekend job to help them pay their way. Breaking into the world of work early is a great idea, as it will help them to make a start and may mean they’ll find it easier to find other employment later on. If there is no suitable work in the nearby area, you could decide to pay pocket money only when your teen helps with household tasks and chores. If you can, you may even decide to tip a little if they go above and beyond.

Make the Most of Living at Home

If a teenager makes their own cash, what they do with it is their own choice. However, if they live at home, it’s worth reminding them that now is the time to be frugal. Their living expenses may be low, but they shouldn’t take any disposable income for granted. This is usually the time in a young person’s life where they are under the least financial pressure, so it’s perhaps a good idea to impose a cap on non-essential spending and let them watch as their finances grow. Don’t be too draconian though – making financial mistakes is part of growing up, and it’s best for them to experience this in the safety of their family home.

With experience as a full-time environmentalist and part time journalist, Lisa heads the post of editor at California Herald. She covers all the significant proceedings in the world of Environment while editing all the news pieces posted over the website to ensure everything aligns with the journalistic format.

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