It is a dream of every parent to bring up responsible teens. Parents want their teens to adopt different things in life, among them being good saving and spending habits. However, many are those who don’t know how to do this. This article will articulate different aspects as far as teaching good saving habits is concerned. Here are elements to incorporate into your lessons.
Differentiate Needs From Wants
Start by teaching your kids about the differences between needs and wants. Let them know that needs include basic things like food, shelter, clothing, health insurance cover, and education. Explain to them that the wants are all other things not necessary to include the movie ticket, the latest car, and the best smartphone and designer suits. Once they can differentiate the two, they will be conscious of their spending and saving habits.
They will grow up with the same tradition and become responsible adults in the future. Such practices will ensure no adults doubt their saving habits, as witnessed in the NFCC’S 2019 consumer literacy survey, where only one in every five United States adults feels confident about their saving habits. It means a significant number of them don’t have confidence in their saving habits. This is probably a result of inadequate knowledge of saving and spending when they were young.
Money-Saving Should Be a Rule
As a parent, you should make rules, and your teen should adopt those rules. And when it comes to matters of saving, there should be a rule of not touching money saved. This may sound harsh and unentertaining to them, but later it will make sense. Let them save a certain amount of their earnings or gifts received from relatives. They should not touch or use the money until they attain a certain agreed amount and use the money for the intended purpose. Otherwise, money saved would mean nothing if used for the wrong purpose.
Offer Financial Advice
According to the recent survey conducted in 2020 by the Rowe price, 40% of parents don’t discuss the stock market with their kids. 32% never talk of saving and retirement. It was a clear indicator that they were not aware of the essence of their advice or that of a financial advisor to their children. Only 17% of Americans embrace financial advisory services, showing that financial advice has not been their thing since they were kids.
If you want your kids to embrace saving and good spending habits, it should be an ongoing event. Please don’t wait until they are grown. Make arrangements for a regular meet-up to discuss money. If you are not available, show them the need for a financial advisor whenever necessary to keep the conversation going.
Share Benefits Of Saving
As a parent, you should act as a good example. Now that you want your teens to adopt saving habits, you have probably done it yourself, and you can see the benefits. Use such benefits when talking to them about savings.
That might mean revealing or showing the balances in various accounts and telling them how you can use the amount saved. For instance, if you have an emergency account where you draw cash in case of an unprecedented event, show them to understand what you mean by saving.
Teach Them to Give
Your kids can’t go wrong with giving because there is that spirit that comes with giving. Show your kids the need to open their eyes to the condition of others. Giving can be of different types, including giving to the less fortunate individual or the government. When it comes to providing information on taxes, explain to your teens the importance of taxes.
Let them know that, through the taxes, they get different governmental services, like correspondence, toll-free telephone helpline, among others. Show them that people are willingly paying taxes like in 2017 when the internal revenue service collated $3.4 trillion in taxes. Let them know, through the taxes, the government offers services that otherwise would be expensive or impossible to access as individuals.
Saving has no age limit, and your teens can get into the game early enough. It is even better since they will grow up with the same mentality and become responsible adults. Some of the ways you can teach your teens how to save include differentiating their needs from wants, making money-saving a rule, offering financial advice, sharing the benefits of saving, and teaching them to give.