“Balancing your money is the key to having enough.” ― Elizabeth Warren
Simple money management lessons you learn early on in life, helps you become a successful saver in the future. Teenage is the right age to explore and learn money management skills.
Teens good at finance management have bright chances of turning millionaires by their mid age, given the power of compounding. Does it not sound great! Read through to learn a few money management tips for teens.
Learn Key Terms:
Usually, financial education is not a part of the curriculum and thus, many do not understand the commonly used financial terms. Research, learn and get acquainted with the key financial terms like credit, debit, national debt, annual percentage rate, annual percentage rate (APR), payday loans, etc. This learning certainly helps in real-life money management.
Earn Your Money:
The sooner you understand that hard work reaps rewards, the better you will learn to value your earnings. Take up simple chores around the house or in your community and check if you can earn. Save your pocket money or the money you receive in the form of presents or gifts. You may find it interesting to know the 5 saving mantras of successful savers. These are your first steps for securing your financial health.
Create Saving Plan:
Have a clear cut saving plan to get your job half done. To begin with, take three containers and label them as ‘gifts and charities’, ‘spendable amount’, ‘savings’. Calculate your expenses and leftovers. Fill in the containers accordingly. It is amazing the see those containers filling. Once filled, deal with each container differently, meaning use the money in each container only for the dedicated purpose.
Know About Credits:
Learn about credits – good credit and bad credit. Understand the importance of a good credit profile by paying off the full credit balance every month. Get a clear understanding of the difference between debit card and credit card. Analyze each one’s benefits, security issues, percentage rates, liability, and security. Be aware of the impact of credit score on financial planning.
Set Clear Goals:
Set clear goals to effectively save money. Your goal could be as simple as buying a music instrument or a hard disk. Accumulate amount, gradually, until you have enough to meet your goal. Thus, you get habituated to saving towards a goal, without distraction. In the long run, you can set crucial financial goals in life and achieve them with ease.
In conclusion, teens are to be more involved in money management to get acquainted with finances. If you feel that you need more advice on money management, approach financial advisory like ArthaYantra. Learn the key financial terms, ways to earn, goal setting and money saving. Thereby you are not just learning to save, but are helping yourself to get rich in life.