The Piggy Bank: The Big Lessons for Teens
Freedom. It is what every pre-teen to teen aged child dreams of! But are they prepared for this taste of freedom? What about financial freedom, are they ready for that? During their teen years they will start making real money and likely, big money decisions that could affect them for the rest of their lives. While this can come across as scary and overwhelming; with a little guidance, it can be fun and exciting for our teens!
It is important that they start thinking about long term goals—they are no longer saving for a new video game, they are establishing lifelong financial security for themselves. Their first job can teach them many things—a good work ethic, scheduling but also, gets them actively involved in the value of money and how that works into planning for their future. It might be hard for your teen to wrap their head around the concept that they will be an adult soon but the future comes along much faster than they think and it’s not too early to think about where they’d like to be financially, in their 20’s and 30’s.
The sooner they start saving money, the better off they will be. With that said, consider helping them invest their money—the sooner they invest it the more it will make for them. According to fat wallet, compound interest on an investment made in their early teens could make them a huge profit by the time they hit their early 30’s. Here’s the tough part though, it is time for parents to take their hands off the steering wheel and allow their teen to take over. They will make mistakes but it is important that they make them now instead of in the future when there is more on the line—like not being able to pay rent. If they make mistakes now then they will be able to learn how to deal with them.
Sources: https://www.fatwallet.com/blog/teach-finance-to-teens/