Tips to manage your money as a teenagers

Parents play an important role in shaping their kids’ financial behaviour and attitude towards money. Many teenagers rely on their mum and dad to set the right example when it comes to managing finances. Of course it’s not always easy to talk to teenagers about money, particularly as they approach adulthood. Bearing that in mind, we’ve pinpointed some areas where you can help prepare your teenagers to navigate the tricky waters of personal finance.

The number one piece of financial advice I can give you is to not spend money you don’t have. This is how people go into debt. Seems easy enough, right? Well, if you keep track of your credit card bill, and make sure you have enough money to make it through each month, you should be fine. It’s recommended that you take out as few loans as possible, as they’re ridiculously hard to pay back because of interest.

Sharing responsibilities with your parent

It is important as a teenager to recognise the value of money and understand that it is not an unlimited resource.

Give yourself a chance a freedom to manage your own budget will teach you valuable lessons about:

• Only spending what you can afford, and
• Avoiding the pitfalls of unplanned expenses.

Always pay yourself first.

With any income you make, set aside in savings first. If you feel tempted to touch it, maybe ask your bank if they have any options for locked savings accounts.

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Invest. 

People don’t make money by having good jobs; they do it by having good investments. Here are some good ones:

Certificates of Deposit.

These can be obtained at whatever bank you currently use. They have pretty good interest rates. You put money in for a predetermined amount of time (ranging from 3 months to 9 years). The longer you put it in for, the more interest it will have. Just remember that once you put the money in, you can’t take it out until the time is up.

Also, the minimum deposit requirement is $2500–$5000, which might be a problem. Just remember to save.

Stocks. 

These are a bit risky, but they’re worth it. Do some research, ask some people about them. They’re expensive to buy, usually around $100 each depending on the stock (unless it’s a penny-stock).

Bonds. 

These can be purchased from the government. They aren’t worth any money until a certain date. I would recommend researching those.

BE SURE TO DISTRIBUTE YOUR INVESTMENTS EVENLY.

Don’t just throw all of your money into a single investment, because if it goes South, you’ll be screwed.

Wants vs Needs.

Before purchasing anything, think about it. Is it something you really need? Or is it something that you just want? Do you really need those new Jordans/Nikes/Adidas/Yeezys? Or the new CoD that came out? I’ve saved exponentially more than before simply by cutting costs on things that I don’t actually need.