There are a lot of things that are scary about raising a teenager. There’s the rebellion and the sudden mood swings amongst many other changes that parents have to look forward to. However, a new trend is emerging that parents need to be concerned about. Teens aren’t saving money.
Should you give your teen an allowance?
Giving your teen an allowance will help to teach them to appreciate money. This is the argument many parents use to justify giving their teens some spending money. However, the lesson is lost on the next generation.
Teens have certainly caught onto the importance of money for purchasing items. However, they don’t see the importance of saving money.
Why your teen isn’t saving money
- They’re been raised in a consumer society
If there is one thing that teens have learnt about money it’s that it is made for spending. When a teen receives their allowance, the first thing they think about is spending it on some item that they ‘need’. According to a recent study, teens in the US spent over $259 billion dollars on ‘non-essential items’ in 2016.
Teenagers understand the concept of spending money, but not that of saving and who can blame them. They’re been raised in a consumer society. Adults spend billions of dollars every year on items that are neither necessary nor useful and teens get a front seat at the show.
Fix it: You can correct this thinking in your teen by examining your own spending habits. What do you spend money on? Do you only purchase essential items? Your teen will pick up on your habits and take their cue from you.
- They don’t work to earn money
You can’t truly understand the value of money unless you’ve worked to earn it. Teens are used to having their allowance handed to them. Many don’t realize that this is a privilege. They even feel entitled to having an allowance.
Fix it: instead of giving your teen an allowance just because they are your child and you love them, encourage them to earn the money. They don’t have to look for jobs outside the home. They can earn their allowance by doing extra chores around the home. They’ll learn the value of working and are more likely to rethink how they will use their hard earned cash.
- They don’t have goals
A teen’s life is simple. Their goal when it comes to money is to have more money. While this is a goal for many people, it’s a lazy goal. It isn’t specific.
Fix it: You should begin teaching your teen the concept of SMART goals. They should make their goals for their money more specific. This will give them a reason to save.
- They don’t know how to budget
Many teens do things on the spur of the moment. They see something and want it. They then use their allowance to buy it. It doesn’t matter that they don’t use it more than once. They’re serial impulse buyers.
Fix it: You can help you teen by teaching them how to make a budget and encouraging them to stick to it. This not only teaches them how to use their money wisely but also enables them to implement boundaries in various other areas of their life.
- They don’t have a bank account
Where does your teen put their money when you give them their allowance? Chances are it doesn’t make it further than your teens pocket before it’s placed in a register in a store. Many teens don’t have bank accounts. Many more don’t even understand the basics of how bank accounts operate. It’s easy to spend money when it is within easy reach. It’s harder to spend money when it is locked up in an account.
Fix it: Help your teen open a bank account. There are various up-to-date tools that can help them learn more about banking and how to operate their accounts online. This will help provide them with a place to store their money and equip them with skills they can use for the long term.
- They hate feeling micromanaged or restricted
Teenage is a time when you’re just finding out that you have a voice. It’s a time when you want to break out of your parent’s shadow and define yourself. It’s no wonder teens don’t want their parents telling them what to do with their money. They don’t want to feel restricted as to what they can or can’t use their money for.
Fix it: This is a tough one. You’ll have to be creative in order to reach your teen. The best thing you can do is avoid telling them how to use their money. It will only make matters worse. They need to feel in control of their finances. Even though it’s hard, you’ll need to back off and give them control.
- They don’t see the point of saving
Why should you leave money to sit there when it can be better used to buy an item that I’ve always wanted? This is the reasoning many teens use to justify their spending.
Teenage is a blissful period in the cycle of life. You only live for today and never think of what will happen in the future. This is understandable. What fourteen year old is thinking of how they will cater for their retirement?
Fix it: Help your teen understand the concept of putting money away for a rainy day. They don’t have to put all their money away. Help them to see that even putting a few dollars aside can help them save a large amount in a year while still having enough to spend what they love today.
This list is in no way exhaustive. However, it does give a glimpse into the mind of a teen when it comes to putting away money. The concept of saving can be shocking to many teens. However, with a little creativity you can help your teen change their perspective and begin to save money today.