Encouraging teenagers to save money is not easy, especially when the rewards for spending money are so intense. However, a few things might help, from role modeling functional skills and behaviors to setting up a savings plan.
This article looks at the issue of saving money for teenagers: why it is valid, why it is difficult, and how you can help.
Why Should Teenagers Save Money?
Saving money is a valuable skill and useful for the future. Saving money for later can unlock future rewards in opportunities, acquisitions, and experiences.
The skill of saving money will eventually become a behavior. In other words, a young person will begin to do it every day without really realizing it. The way we behave with our spending habits needs to be reapplied to our saving habits as well.
Saving money is harmless, subtle, and achieved in tiny steps. It is more about how long you do it rather than how much cash you can put away. These kinds of “financial ideas” are worth sharing with teens.
Financial literacy is essential because how we learn (or don’t learn) to deal with money will impact our entire lives.
What Can I Do to Encourage a Teenager to Save Money?
There are many ways to help young people develop a “savings habit.” These range from role modeling one yourself to sitting down and helping them draft out a savings plan.
- Help them open a bank account and explain the difference between the types of accounts
- Talk about credit cards and how they work
- Be open and honest about spending traps and any that you’ve been caught in
- Create a budget together
- If they are prepared to track their small purchases, so should you
- Offer to pay them to do select household chores
- Support them in finding a part-time job
- Make it mandatory for them to save money
How Can Teenagers Save Money?
Teenagers can do many practical things for themselves, from thinking about a budget to using a money box.
- Make a budget
- Begin a purchases tracking notebook
- Open a savings account
- Get a part-time job
- Get a piggy bank and deposit it into an account when it is complete: it is incredible how coins can add up
- Consider purchasing second-hand clothing and shoes and save the price difference of new items
- Consider purchasing a second-hand phone and saving the difference in the price of a new one
What Do Teenagers Spend the Most Money On?
Teenagers typically spend money on small items every day, such as food and drinks. Additionally, they spend money on larger purchases, such as clothing, shoes, and upkeep costs, such as apps and phones.
Small spending is the most frequent and most likely to go unrealized. These include:
- Sweets and gum
- Phone apps
Larger “keep” spends represent items that will be kept and used:
The most critical costs are those for upkeep, which include
- Books and study materials
- Phones and phone components
- Laptops and laptop components
Why Are Some Teenagers Reluctant to Save Money?
It’s common for teenagers to want to spend money. It’s part of life; everyone does it, and acquiring things is a part of their identity and expressing themselves. However, the following may be the reasons why some teenagers spend and save while others do not:
- Not having an income to save
- Not having a reason to save
- They need to be purchased by someone else
- Having everything they want to be purchased by someone else
- Having to purchase everything they need themselves (and therefore, there is nothing left to save)
- Buying everything they want on their own
- Not having a plan or vision of a future
- There are no long-term plans or goals
- Not understanding finance or how it applies to them
Why Is It Hard for Teenagers to Save Money?
Teenagers need a role model and future with financial plans and goals. They also need a backup income when needed, a part-time job, a dose of creativity, and the ability to do without.
Without these things, there is not much incentive to save anything. Saving money is more likely to be valued if it is role modeled and more likely to be practiced if plans and goals include financial ones.
It is also hard to save if you do not have a small income and backup finance for the expensive necessities.
Additionally, it is also important to remember just how much teenagers are compelled to take part in the cycle of consumerism: they are exposed to streams of never-ending advertising.
Why Is So Much Advertising Aimed at Young People?
Unfortunately, young people represent the most “cashed up” portion of consumer society. This is not because they have the most money to spend.
It means that young people are the most lucrative consumers. The best targets for powerful advertising reach young people through social media, concrete media, television, phone apps and games, email, and online video sharing platforms such as YouTube.
Advertising aimed at young people is clever. Advertisers can drive home the necessity for just about any item or service they want to sell by exploiting insecurities and undermining identity and self-esteem.
Furthermore, this leaves teenagers with perpetually long lists of things they need, making balancing a savings plan even more challenging.
Supporting teenagers in saving money can begin with candid discussions about their spending hopes and goals. Starting with a modest budget and small savings is an excellent way for young people to experience personal financial activity and develop beneficial skills.
Image Credit: [Karolina Grabowska]