Raising Financially Literate Individuals: Budgeting Tips for Teens
Financial literacy is not just for adults; it is for everyone, regardless of age. If you have income then you are ready to create a budget. While your teen’s income may not be a stable source yet, it pays to teach them good budgeting skills that they can use in the long run. This way, it will be easier for them to handle their finances and make more informed money-related decisions in the future as an adult.
Firefighters Credit Union has compiled a list of simple, doable budget tips that can help ease your child’s journey toward financial literacy and independence when they grow up. Read on to learn more.
Start by Defining the Basics
Before you delve into the actual task of budgeting, your teen must have a clear grasp of what it is and why it matters. At the very least, teens should know that budget plans help monitor where their money comes from (income) and where it goes (expenses). Having a budget plan can help them manage how much they will spend in a certain period of time so they can avoid debt or having insufficient funds, especially during emergencies.
Once you have covered the basics, talk about budget concepts, like investing, saving, gross vs. income, etc. Your teen may have a lot of questions starting off. It is important to encourage them to ask questions about money matters they do not understand, and be there to show them the ropes of effective budget planning Also, give your teen the resources to seek out answers to financial questions you may not know yourself.
Teach Them About Differentiating Wants and Needs
You can guide your teen in categorizing their expenses based on the things they can and cannot live without. For example, needs include basic necessities like food, clothing, and personal care, while wants may refer to entertainment and leisure activities.
By the end of this, your teen should learn how to budget their money without compromising their needs. This way, they can minimize the chances of unwanted debt accumulation.
Explore Various Income Opportunities
Budgeting comes easy when one has a steady income stream. Encourage your teen to explore ways on how they can use their physical and mental capabilities to earn. For example, they can take jobs around your neighborhood or apply for part-time gigs. This will help them get easy money, which they can use in building their own monthly budget.
Encourage Teens to Listen to as Much Financial Advice as Possible
Money matters can be quite confusing, especially when one is just starting out. As parents, it falls on your shoulders to provide your teen with as many resources as they need to figure out finances and budgeting. Teens may also consult with relatives, teachers, or other adults. However, it can be useful to seek financial advice from a professional as well.
At Firefighters Credit Union in La Crosse, WI, we provide a wide range of financial solutions to serve the best interest of our members. Whether you need help with budgeting, saving, or investing, we’ll always be ready to assist you. For more details, contact us today.