Handing Over The Keys: Financial Wisdom to Teach Your Teen
The teenage years are a time of transition from childhood to adulthood, and although it will be a few years before your teen is out on their own, it is a good time to start teaching your teenager some important life lessons. What advice should parents be bestowing on their teens? One of those life lessons is how to be smart with money.
Always Save Whenever Possible
The easiest way to become financially secure is to save money whenever possible. Having money in the bank is always smarter than spending too much on a new car when a used one could work just as well. This is because there is no guarantee that a job loss or medical bill won’t come when your child least expects it. However, having money in the bank can serve as a cushion against the severe financial blows that life can bring.
Pay Off A Debt As Soon As Possible
Going into debt means that your money is going to a lender instead of your bank account. Additionally, interest will continue to accrue for as long as there is a loan balance. Therefore, it is smarter to pay off the loan in fewer payments as opposed to paying off the loan over a longer period of time because the monthly payments are smaller. Your kids should also learn strategies to stay out of debt such as saving up for large purchases because that means less of the purchase has to be financed.
Buying Used is Preferable
While you want to buy your socks and toothpaste new, you can get away with buying a used car without having to sacrifice quality. According to St. Louis auto dealers, this is because you will pay less for it while still getting a great car. So while your teenager will probably appreciate a used car that isn’t five or ten years old, technically, a used car is any car that is at least a year old. Buying used is economic, smart, and under-utilized.
Find Things That Keep Their Value
When purchasing a car, it is important to find a car that will keep its value. This is because it is much easier to sell the car or get more for a trade-in when your teen is ready to get a new car in the future. This helps reduce the amount that has to be financed on the new car. Overall, it ties in to the other concepts that you are teaching them because your teen will have less debt to worry about.
Generally, teenagers are going to do what they think is best, but you have to guide them toward smart money management techniques to ensure that they are financially independent as soon as possible. Teaching your children proper money handling while they’re young is what will lead them to have successful adult lives, not accumulating massive amounts of needless debt, and living their best, financially stable lives that they can.
