Money management tips for teens
As summer comes to an end and area students begin to hit the books, it’s a great time for parents to encourage their teens to follow a path toward financial proficiency.
Getting information and hands-on money management experience at the high school level helps students take better control of their finances as adults.
Financial education in the classroom, coupled with parental support at home, have the greatest impact on improving students’ financial literacy. Parents can also incorporate their own values and household circumstances into the learning, which will reinforce personal relevance and the importance of building good financial habits.
The Independent Community Bankers of America offer the following tips to high school students and their parents on developing money management skills:
® Set “SMART” (Specific Measurable Attainable Realistic Trackable) goals. Choose your priorities whether it’s saving for a computer or building an emergency fund – make sure they are achievable. Create a plan to follow and measure your progress over time.
® Start a savings account if you don’t have one already. It will help fund future purchases, and in the meantime, you’ll be earning interest.
® For working-age students, consider part-time employment. You will learn more about personal responsibility and have an opportunity to manage daily and long-term expenses.
® Track what you spend to develop good budgeting habits and avoid making impulse purchases. Many personal finance apps are available online to help you track your spending.
® Learn about credit. Talk with your parents and your local community banker about the complexities of using credit cards. They will discuss the responsibilities associated with these forms of payment to help you establish and maintain good credit when the time comes.
® Gain perspective about risk and reward. Understanding how stocks, bonds and mutual funds can affect an investment portfolio shows you how financial decisions can grow or shrink your savings into retirement. Some high school classes and financial literacy-based websites provide simulations of how these investments work in the real world.
Community banks are here to help teenagers and young adults learn more about how to properly manage their finances and build credit. Now is the perfect time to start thinking about their financial goals and how they can work toward them.