Give teens financial tools they need
Too many teens get their first shot at managing money after they’re out of high school.
By that time, they’re already hooked on fads, fashions and fast food. Some college-bound seniors apply for extravagant amounts of financial aid just to cover optional expenses, such as cars, clothes, concerts, electronic games, gym memberships, spas.
l What can you say to 15-year-olds to keep them from wasting money on ‘here today and gone tomorrow’ fads?
l How do you motivate a 16-year-old to save a few bucks for some of his or her own college expenses?
l How can you convince a 17-year-old that spending $500 on a prom dress or a stretch limo is a waste of money?
What can a parent do to communicate to teens that saving money can be cool? Start by letting them know at very young ages that there are things in life that are much more worthwhile than owning the latest toy on the market. (See our May10 blog: Teach Tots How to Manage Money). Explain that they only make sellers richer and themselves poorer if they fall for every whim they see. Tell them that buying new clothes, or changing phones or hair color whenever new styles come out, can be an expensive, never-ending cycle that robs them of better things.
Help teens see money as a tool for building their future
Parents should encourage high school and college students to save some of their paychecks and gift money for something big, like a college degree, a new car after they graduate, a trip to Europe or Asia, or their first home. Rather than owning the latest set of headphones, downloading all the music on the Top 100 list, or buying a few more video games for their X-Box, teenagers need to be taught the value of saving for more meaningful things.
Most teens don’t have a clue that money can multiply . . . if saved instead of splurged
Besides saving for costly, yet more satisfying, big-ticket items, a few teens learn from their families how to invest. Those kids watch their money multiply, while their peers struggle to pay unnecessary bills. High school students are not too young to learn how to invest some of their lawn-mowing earnings or babysitting pay to reap dividends.
Most teens (and many adults) don’t know that they can invest money on the installment plan. Some financial advisors set up accounts for people to put away as little as $25 or $50 a month. Small amounts add up if invested in good companies or thriving mutual funds. Young investors get quarterly reports, so they can see first-hand how their money has grown. At the same time, they learn a few good economics lessons, practice math skills and more.
If you have convinced your teenager that saving and investing money can lead to a brighter future, call 616-531-5220 to make an appointment to open an account. You can also go online to aamllc.com to select a meeting time. Click on the red bars: APPOINTMENT WITH RON, then BOOK NOW.
Manage Your Money . . . financial facts for a brighter future provided by Advancd Asset Management LLC Follow our blog: aamllc.com Ronald Van Surksum, CFP 4555 Wilson Ave SW – Suite 2 Grandville, MI 49418 For permission to reprint: email@example.com firstname.lastname@example.org Phone: (616) 531-5220 Cell: (616) 450-8439