This is a sponsored post. All opinions about smart financial tips for teens are 100% my own.
Time flies, and nowhere is this truer than when it comes to your children. My son is already 16 years old, and at times I wonder if I have done everything I could – or should – have done to prepare him for financial success. With that in mind, I wanted to do a post on financial tips for teens.
Hopefully, this would be useful for any teen, and with luck, it would help to prepare them for their adult financial life. So, let’s look at some financial tips for teens.
Financial Tips for Teens
Embrace the Power of Time
Teens have one thing going for them that is more powerful than all of the riches in the world, and that is time. In fact, time can even create its own riches. Put that to work for you while you are young, and you will never have a lack of resources throughout your life.
Here’s a good example. Imagine that you take a summer job, and make $2,000. You decide to keep half of it, or $1000, for your future self.
If you find an investment (even some savings) that pay a 5% return and never touch it again, you would find about $12,000 waiting on you when you retire. If you continue to do something similar while you are in school, you could easily have many times much put aside, without having to lift another finger towards it again. Time is more powerful than riches.
Make Saving a Habit
Just as we mentioned contributing on a regular basis to investments above, you can make the act of saving money a habit. The wonderful thing about a habit is that you do it automatically, without extra effort from your future self.
While you are young, you may find that you can save half of your money on a regular basis. As you grow into adulthood, with all of those responsibilities, you may find that 10% is a better target.
But the important thing is to build the habit now so that it can work for you later when you might need it the most.
Use Student Discounts
The power of money comes into play when you save it, not when you spend it. Luckily you probably already have a great tool for doing exactly that your student ID card. Many places will give a well-earned discount to hard-working students, you only have to take advantage of it.
Amazon offers student discounts on its Prime membership, which can save you more money. Many data services, such as music and video entertainment, offer discounts to card-carrying students.
Apple and others offer great discounts to students on much-needed comput9ng hardware. If you look, you can even find discounts on movies, dining, and gym memberships.
However, one thing to keep in mind is that you save money only if you were going to use that product or service in the first place. Saving half on a gym membership that you don’t use is a complete waste of money, no matter how attractive it seems.
Set Goals
Setting goals are a great way to reach your financial targets, and they build great habits. Done right, a goal can be attained by simply working smarter. For example, when you do find a student discount, consider keeping the money saved separately and put it towards a given goal.
Use the Power of Three
When you combine the power of goals and habits, you’ll find that they were made to work together. But when you combine these two with time, you’ll find that nothing is beyond your reach. The best advice I would give anyone, not just teens, is to set a goal, create a habit to service that goal and give it the time it needs to be effective. Just like that, financial mountains can be moved. Having a strategy makes all the difference.
By following these simple tips, teens will find that they have financial power at their disposal. The single most important thing is to not put off good financial strategies simply because they are young. as they say, time is on their side, but it has to be used to be effective.