Personal finance for teenagers!

Oct 13 2013, 12:27 IST
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Financial experts claim that there are a few things which are considered a must when it comes to personal finance. Financial experts claim that there are a few things which are considered a must when it comes to personal finance.
SummaryMost teens have no clue where money comes from and where it goes.

a loss to the investment potential.

* Stay away from debt – When your kid will be starting out on his or her own, the key point to keep in mind is to spend within limits. High expenses tend to hit hard in the beginning so most kids end up exhausting the credit card limits. When you do that, it will limit your options. Your kid may be tied up to paying back and won’t be able to get ahead with anything.

* Act your age – You don’t have to finalize the first apartment you see or if your old car is still in working condition, there is no need to buy a new one. Parents must make their teenage kids understand the values of struggling to earn income. Most parents were also struggling with their finances when they were young so just because parents can afford to buy a new car every three years doesn’t mean the kids can do that too. Kids should learn how to be comfortable with limited means too. It is not wise to buy latest tech gadgets if you are low on money.

* Take advice – All teenage kids face problems with their finances. This is because typically the expenses they incur are more than the money they earn or the pocket money they receive, as the case may be. Parents must advice their kids to connect with other like minded teenagers and understand their experiences with money. There are many teenagers who are trying to make it large with limited funds and their story or expert advice is available on blogs, facebook posts or tweets. Teens should stay in touch with other students who share the same interests so as to manage money more efficiently. In this generation where social media plays a big role, it is easy to get guidelines on every single aspect of personal finance from such avenues.

* Set goals – Dreaming big and idealistic is the key to achieving your goals. Keep a practical goal and work for it. Teenagers should be taught this aspect of personal finance from the beginning. Teens understand this concept if they are made to save for something they want - be it a bike or a tech gadget or a holiday, rather than be given with the funding immediately on asking.

The smart way to educate your teenage children regarding

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