If you think managing your money is challenging, you’re not alone! Nearly three-quarters of teens (74%) say they’re not confident about their personal finance knowledge, according to a recent survey
Who can you turn to for learning more about money management? While most people (83%) agree parents are the most responsible for teaching their children about finances, about three in 10 parents (31%) “never” do and 24% discuss finances with their kids less than once a month, per a separate survey
Some schools offer or even require students to take a personal finance course, but it depends on where you live
Learning more about money management while you’re a teen is important, both now and for the rest of your life. Studies show that teens who learn about personal finance make better money management decisions later on, including around college financing, savings, loans and investments.
Here are five tips to help make managing your money less confusing:
- Have “the talk” with your parents – If your parents haven’t yet discussed personal finance with you, ask them about it. For example, “What’s the best advice you’ve heard for managing money?” The subject doesn’t need to be covered in one sitting. Instead, regularly discuss it when it’s relevant, such as when you’re shopping together.
- Track expenses and stick with a budget – Whether your money comes from a job, gifts or an allowance, regularly track what you spend and stick within a weekly or monthly budget you set for yourself. Within your budget, plan for what you’d like to spend on yourself, what you’d like to save for the future, and give as gifts or to charity.
- Keep in mind buying “needs” versus “wants” – While having a smartphone might be a “need” for you, buying the latest and priciest smartphone is likely a “want.” Before purchasing anything you’d define as a “major” expense (such as, anything more than $20) decide if it’s really something you “need.”
- Understand “credit” and “credit scores” – A credit card or loan are both types of credit in which someone provides you with money under the expectation you’ll pay it back. Those who get in financial trouble with their credit have spent more than they’re able to pay back. This in turn negatively affects their “credit score,” which predicts how likely someone will pay back credit. Know that having a bad credit score can affect your ability to get a loan for a car or home, rent an apartment, or even get a job.
- Keep saving regularly – If you have a Dinero savings account with Advancial, that’s great! Keep saving your money regularly and you’ll be amazed how quickly your efforts add up!
For high-quality money management information as well as a variety of financial tools built especially for teens, turn to Dinero