Teaching Teens to Save Money
For a Lifetime of Financial Freedom
Teaching teens to save money is a great way to help them master the basics of money management. As teenagers learn the importance of saving money, they become better prepared to be financially responsible adults, to enjoy the benefits of living debt free, and ultimately, to achieve financial freedom.
The challenge, of course, is to get your teenagers interested in saving money in the first place. With so many lessons that are important for them to learn and so many other distractions, how do you get their attention?
Forcing Teenage Money Management
If your teens are accustomed to enjoying a nearly unlimited supply of funds for them to use as they please, it is time to turn off the spigot! They won’t be able to see the benefits of saving money until you place some of their wants slightly outside of their grasp.
When your teenagers do not have the money to buy what they want, they are forced into a dilemma of what to do. Here is where you can help steer them in the right direction by offering some alternatives.
- They could prioritize their spending. This may help them to cut down on impulsive spending and to learn to distinguish between need vs. want.
- Perhaps they would like to find some extra ways to make money. When teens earn money it teaches them responsibility and how to interact in a situation other than home or school.
- They could learn to wait until they have saved the money to buy what they want. Delayed gratification, or waiting to fulfill a desire, is at the heart of teaching teens to save money.
Other Ways to Promote Teen Saving
- When teaching teens to save money, it is helpful to encourage them to focus on a goal. Is there something that they want but can’t afford now? It is best if it would take a few weeks or months for them to save the needed amount. They will have a greater sense of satisfaction when they are finally able to buy the thing for which they worked and waited.
- Use something visual to measure the progress of the growth of their savings. It could be a bank account statement, ledger sheet, computer spreadsheet, or even a coffee can. Excitement will build as they see their savings grow.
- Get them interested in saving for the longer term by experimenting with the savings interest calculator. They will be able to appreciate the power of compound interest and the effect it has when saving even small amounts on a regular basis.
- If you haven’t already, engage your teenagers in discussions about what role they may have in saving money for college.
- Finally, be a good role model for them. Tell them about things that you would like to buy now but are waiting until you save up enough money to get them.
Teaching teens to save money is an important part of getting them ready to be adults. By learning to save when they are young, your teenagers will reap rewards for the rest of their lives.
You may also enjoy reading this article about money management for teens.
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