ANN/THE STAR – Instilling good money management skills in children through early financial education is crucial before they reach adulthood.
This process can begin as soon as they start receiving allowances or pocket money, and even earlier. As they grow into teenagers, it becomes essential to cover more aspects of financial literacy.
Here are some tips to help you raise a financially-savvy teen:
BUDGETING
The first step is teaching them to spend within their limits.
START WITH A REGULAR ALLOWANCE
Having a consistent income allows your teen to better understand their financial behaviours, and be more aware of their spending and budgetary limitations. This will help them to manage their salaries when they start working.
UNDERSTAND ‘NEEDS’ VS ‘WANTS’
Teach them how to differentiate between the two types of spending. For example, a decent laptop to do their school projects is a need, but a top-of-the-line desktop with latest gaming features is a want.
PLAN AND TRACK SPENDING
Show them how to keep a record of all the money they receive and spend every day. Suggest an easy and suitable way to track their spending, for example via apps or online tools.
It may be difficult in the beginning, but over time it will become a habit.
DISCUSS MONEY MATTERS OPENLY
Include them in family conversations about money. Explain the reasoning behind your financial decisions. This way, they will be able to adopt it in their lives too.
SAVING
This crucial habit should be inculcated into your children right from the very start.
OPEN AN ACCOUNT
Help your teen to open a bank or savings account if they don’t have one yet. Having their own bank account will give them a sense of independence and responsibility over their finances.
FOCUS ON SAVING, NOT SPENDING
Instead of highlighting material goals and achievements like houses, cars and gadgets, share your saving goals and money management strategy with your teen.
MAKE IT A HABIT
Help your teen to save regularly. There are many tips to save money that they can apply.
PROTECTING
In this day and age of prevalent online and data fraud, this is a particularly important skill and habit to have.
BEWARE OF SCAMS
Teach your teen how to detect scam attempts and alert them of the latest tricks used by scammers.
Tell them to inform you as soon as possible if they suspect anything suspicious.
PROTECT ELECTRONIC GADGETS FROM BEING HACKED
Help them ensure their computers, tablets and smartphones are protected against viruses and malware, and that these protections are regularly updated.
Suggest ways that they can come up with strong, unique and memorable passwords to protect their online accounts.
BEWARE OF IDENTITY THEFT
Tell them to be cautious when sharing their personal details. Don’t simply share sensitive details (such as identification number, passport details and bank account information) online or with any unknown third party.
These are just some basic tips to get your teen started on their personal financial journey. – Dr Thiyagar Nadarajaw
