Financial Literacy Skills That Teens Should Know
posted on Tuesday, April 5, 2022 in Financial Tips
Financial literacy is the knowledge of various financial concepts and skills such as saving and investing. One can use these to make sound decisions when it comes to money. Unfortunately, many of our youth today aren’t quite as familiar with these concepts because they do not have access to accurate information.
As they grow older, teens should familiarize themselves with practical financial literacy skills that can help them in the long run. Here are some of these skills:
Understanding the Value of Money
Parents should teach their teenagers about the importance of saving and earning money. One way of doing this is by helping them come up with ways to earn income. If you can, give your teen a weekly allowance or pay them for doing certain chores around the house.
Knowing the Difference Between Wants and Needs
Once they have the means to earn their own money, they’ll learn the difference between their wants and needs. Since teenagers are influenced by what they see online and their peers, a lot of their wants will be affected by these external factors. Because they only have limited resources, they’ll learn how to discern what they need to buy or not.
Budgeting is an important part of money management. Teens should understand that a budget helps them plan out their expenses. It allows them to avoid getting into serious debt and teaches them not to spend more than what they have. Budgeting apps such as Mint and Greenlight are easy to set up and install on phones and can help control spending.
Managing Money in a Savings Account
Teens are encouraged to open their own savings accounts with a financial institution of their choosing. They’ll have a place to store their excess money, and it can show them how much time it can take for anyone to save a specific amount. A lot of financial institutions offer special accounts for teens to help them with their money.
A great way to let money grow is by investing it. Teens do not have to wait until they’re adults to invest their money. Investing early can help them get a huge head start for the future. If a teenager is interested in investing their money, it needs to be done with a custodial account. These are financial accounts that an adult will maintain for the teenager.
Teenage financial literacy doesn’t have to be complicated. To learn more about your finances, contact Community 1st Credit Union and talk to one of our C1st representatives. We have been a trusted institution for more than 85 years.