Financial Habits to Teach Teens and Young Adults for Lifelong Health, Happiness, and Prosperity
It’s never too early to start teaching your teen or young adult good money habits, especially since 18 percent of 15-year-olds lack basic financial skills. And since this is the age at which teens start planning for college, applying for student loans, and thinking about their futures, financial illiteracy among young adults is worrisome for a number of reasons. For instance, the dangers of financial illiteracy include poor spending, budgeting, and saving — and an increased risk of suicide, divorce, and domestic violence.
Moreover, there are many physical and emotional effects of financial insecurity. According to Debt.org, these negative effects range from physical pain and stress to fear, panic, anger, and depression.
While this information is certainly concerning, training your child to budget and manage money can help him or her to live a healthy, happy, and prosperous life. Review this article from FiClub to learn about some of the financial habits teens and young adults should learn before venturing out into the world.
Paying bills is part of life, and training your teens to pay for one or more household bills can help to set them up for financial success later in life. As a few examples, your teen could pay for his or her cell phone bill each month, your household’s internet bill, or even the family’s Netflix subscription. The idea is to give your teen a bill he or she is responsible for paying each month, so you can track it and ensure that the amount was paid on time and in full.
Following a Budget
Like learning how to pay bills, budgeting can help your teen to better manage his or her money — as it teaches your child to differentiate between “wants” and “needs”. Plus, mobile apps can help teens to manage their money, track spending, and save for the future. Your teen will learn how to spend responsibly and save money for the things he truly needs in life, like food, clothing, and shelter.
Even if your teen isn’t interested in starting a business at this time, it’s important to teach him about entrepreneurship and leadership — as doing so will prepare your child for a future career while helping him to learn important life skills such as empathy, goal setting, and problem-solving. Some of the rules you can teach your teen about success in business include:
● Pursuing a business idea he believes in.
● Staying true to potential customers and clients.
● Treating vendors and manufacturers with respect.
● Putting in the time, money, and effort needed to build and grow a business.
Part of raising a financially responsible teen has a lot to do with modeling good financial habits for your kids. As such, you may need to get better about following a budget, paying off debt, and paying bills in a timely manner — as this will set a great example for your teen or young adult.
Fortunately, you don’t have to change your financial habits on your own — as an accountability partner can help you to set and achieve goals for better money management. When tracking your financial goals and measuring your progress, you can also look at your net worth, emergency fund ratio, debt-to-income ratio (DTI), and retirement savings ratio.
The Bottom Line
Many habits are built by the time children reach nine years of age, so it’s really never too early to teach your kids about finances. Starting earlier in life will set your child up for lifelong health, happiness, and prosperity!
Are you ready to improve your money habits once and for all? Visit FiClub to learn how financial coaching can help you to set and reach your financial goals for a happy, prosperous life!
Guest post contributed by Danielle - you'll be able to find more of her work shortly at The Mama Poppins