Earlier we talked about how to create good saving habits with young children. For those with tweens or teenagers, you know those fun days of saving up for a toy have passed. But the importance of teaching the value of saving is more important than ever. In fact, teaching tweens and teens to save and budget could be THE most important adulting lessons. Rare is the school that offers classes to teach students these skills.
Aside from usual “ignore peer pressure” chats, adults should plan to have open conversations about money, too. Many adults feel children shouldn’t see the household income and expenses. Why confuse them or stress them out? But the best way to teach older children – especially teenagers – about money is to model responsible budgeting. Sharing a typical month’s ledger, even asking their opinion on expense options, provides valuable lessons about living within one’s means. It also illustrates that when they ask for money, it has to come from somewhere. Share financial mistakes you’ve made in the past. Explain the outcomes of poor choices and stress the importance of creating savings.
Teaching tweens and teens how to save and budget now can save more costly mistakes later in life. Older kids begin having more autonomy over their spending, whether birthday money, allowances, or part-time job income. At the same time, junior high and high school kids will feel more consumer pressure to spend money on impulse or trending buys. Advertisements push FOMO (fear of missing out) and YOLO (you only live once) as reasons to spend over saving money. If they get sucked into the hype, kids can quickly burn through their cash trying to keep up images. (Sound familiar to the old ‘keeping up with the Joneses’ adage?)
So, if older children make excessive impulse purchases, adults can show how that takes away from something else. For example, a teen saving for a car can derail their plans by frequently buying expensive clothes and shoes. It’s not about guilting them. It’s about showing them that living a lavish lifestyle can quickly lead them to being broke.
Helping a young adult open a bank account and learning how to take control of their finances now can literally change their lives. Community banks can offer more ideas on how to encourage kids to save by taking the time to explain things to them (and you!). Come visit our team at your local Standard Bank office.