Standard Chartered Bank
How we manage our finances varies for individuals. Some manage better than others. How is this so? More often than not, they have adopted healthy money management habits and capitalised on key opportunities at different life stages.
It’s never too early to learn about managing one’s finances. From children to adults, financial literacy is extremely important to ensure that one has good knowledge and skills around financial planning.
As they say, the early bird catches the worm and this is indeed true of good money management skills. Starting off early does have its advantages from time to less financial commitments in your youth.
With the access we have to information, it is not unusual to have an interest in investing or growing your money from a young age. Once you’re passionate enough about saving or investing, you may suddenly realise that you need money to save and invest!
The most common way that most young people get money is through an allowance. Not every teen gets one, of course, and your parents’ beliefs or financial situation might mean you get little or nothing.
According to various surveys, the average allowance for teens is anywhere from BND50-100 per week.
For those of you who want to explore how you can add to your allowance, try earning some extra dollars through these tips:
From your family
Start close to home. Your parents might reward you for getting good grades in school, or for reading a certain number of books, or for doing various chores around the house. You might even earn some money from siblings, if you offer to help take on some of their responsibilities.
If your cabinet or basement is full of belongings that you no longer need or want, consider selling them (with your parent’s permission, of course).
These might include toys, games, comics, and even old clothes that you may have outgrown and are still in good condition. You can hold a garage sale in your neighbourhood to sell your items.
You might even offer to sell other people’s unwanted items, for a small fee or a percentage of the price.
Another option is selling items online, such as on eBay.
As they say, one man’s trash is another man’s treasure so never underestimate the value of what you deem as no longer useful to you.
This is perhaps the most obvious way to earn money. Aside from putting extra dollars into your wallet, part time jobs also offer invaluable insight and experience.
It is not uncommon for teenagers to partake in holiday jobs and these could be anything from babysitting to gardening and other suitable opportunities.
ONCE YOU’VE MADE SOME MONEY, SAVE SOME
How much should you save? You actually may be able to save 100 per cent of your money. Does that mean you should? Not at all. At the same token, you shouldn’t spend all of it either. What’s important is finding a good balance between saving and spending.
The best way to develop good saving habits is to make saving a regular part of your life, along with spending wisely.
Here’s a few ways you can save:
Save before spending
Whenever some money gets into your hands; from a job or your allowance, take a percentage out as savings immediately, before spending any of the money.
It is good practice to have a special account dedicated to your savings and watching this amount grow can be motivating, encouraging you to perhaps increase the level of your savings.
With your savings intact, you are now able to reward yourself by spending some of your money on a desired item or a treat. Do remember that spending wisely is just as important and before you spend, do evaluate decisions carefully.
Negotiate with your parents
This may or may not work for you, but it’s worth a shot. See if they’ll “match” your savings, in order to encourage good saving habits. If they match your savings dollar-for-dollar, for example, that would mean that for every BND25 you save, they will match that amount with an additional BND25 as an incentive for your positive habit.
Consider the ‘opportunity cost’ of purchases
For example: Opportunity cost is an economic term that applies to many parts of our lives. It essentially refers to the cost of giving up one to act on an alternative. Imagine either buying concert tickets for BND50 or investing the money. If you invest for 10 years, and your investment grows by an average of 11 per cent per year, your original BND50 will become BND142. So, your decision can be framed like this: “Would I rather have these tickets now or BND142 in 10 years?” If you’re thinking of buying a pair of shoes for BND75, consider whether it’s worth the opportunity cost of BND600 in 20 years. Perhaps it is. If so, then by all means, buy the shoes – so long as you can afford it.
These ideas should help you get started. Remember, it’s never too early to start developing positive financial habits that will go a long way towards achieving your financial goals.
This article is for general information purposes only and while the information in it is believed to be reliable, it has not been independently verified by us. You are advised to exercise your own independent judgement with the contents in this article.