In African culture, we say “Ligotshwa lisemanzi,” which basically translates as “you teach(start) them young,”  since it is difficult to alter someone’s mind after it is formed, made up, and developed. This is true in all aspects of life.

Most parents say that their teens do not listen to them when it comes to advice on money concerns; the reverse is also true, teens actually embrace their parents’ financial advice.

Teenagers have made billions of dollars in recent years through part-time and summer jobs/side hustles. With the introduction of several internet earning possibilities, kids are becoming smarter and earning more money than their parents ever did in their lives.

However, these young minds must not only know but also comprehend how to manage their funds properly. When you “know better, you do better” (Maya Angelou).

Some have spent the majority of their earnings, while others have saved the majority, if not the whole amount, for a large purchase or their college education. 

This era in which parents now live has caused them to take a hard look at themselves, the mistakes they have made as parents in the past, and ask the difficult questions of what they can do to enhance and stabilize their teenagers’ future financial journey, as it requires a different mindset and lifestyle than they had experienced in the past.

Kids nowadays are growing increasingly aware of their family’s source of income and financial situation. They use these money-spending rules at random when they strike out on their own, which is risky since once established, they can never return to the original intent—developing a strong foundation for good money management principles.

As a result, it is more a parent’s job now than ever before to begin teaching their adolescent children to manage their money wisely from an early childhood developmental stage (say, around 10 years) when they can speak about, understand, and handle money. Unfortunately, our students are not taught these values in our outdated educational system.

Here are some ideas on how as a parent, you may encourage your teenagers to spend, save, invest and give their money

1. Set a good example.

Your children will see how you spend your money based on your lifestyle.

If kids see you allocating a particular amount for a certain family requirement, they will do the same when they are old enough to make their own living.

If parents want to WIN with their kids, they must first create a family Spending Plan (Budgeting: Roadmap to Financial Wellbeing) that divides it down into Household Expenses, Savings & Investments, Debt, and Giving. 

For your younger audience, you can have jars labeled with all of those titles: Personal Spending (50%), Savings & Investments (45%), and Giving (10%), and then label and assign a percentage to each jar (shoe boxes). Just to get them hooked on the vocabulary, concepts, and action (behavior) behind it.

2. Assist your adolescent in opening a bank account.

Opening a bank account in their name would offer them immediate financial responsibility. 

Sit down with them and explain how to manage their own account (using the above-mentioned percent allocation principles – nowadays bank accounts are so flexible that it is possible to create those accounts) and that they will be rewarded once they save enough; as a parent, you can give a “bonus” as an incentive for the responsibility demonstrated and the principles followed. 

We are rewarding outstanding example conduct of being a decent global citizen here, and the inverse is equally true if “no show,” then “no incentive,” period. It all begins there.

Their funds may be used to pay for their education, a large purchase such as a vehicle or a house, to establish an internet company, to invest in the stock market, or to learn a new skill that would help them generate more money. 

It also offers kids a feeling of success after they have saved up and have something tangible to show for it. You can look into the particular benefits that banks provide to teens who open up accounts at such a young age.

3. Create a spending plan.

When they hear the term “budget,” teenagers and adults alike tend to cringe at the prospect of having to limit their spending.

Instead, you and your adolescent child might establish a spending planner (roadmap).

This would get them excited and interested and prompt them to consider how they may spend their money wisely.

In addition, have them make a list of their earnings vs their expenses.

Make it clear to them the distinction between goods that they require and luxury items that they can live without. This teaches kids to recognize what is essential in their lives and avoid making rash decisions.

4. Make a fictitious stock market investment.

Make them aware of the financial choices available to them.

Introduce them to the business section of your daily newspapers and financial news agencies, and have them make fictitious investments in firms that make items they enjoy.

The good news is that teenagers are more daring than previous generations, and they have a better grasp on complicated stock market jargon, investments such as cryptocurrency, blockchain, Exchange Traded Funds (ETF), Contracts for Difference (CFD), currency, and forex trading than most parents dare to dream or venture.

They both can monitor (play) the stocks jointly, giving them another option for investing their money in the future. As you spend more time together, you will be pleasantly pleased to learn and connect on shared topics.

5. Giving

As global citizens, parents must model their life for their children by educating them to offer their time to charity, money (funds), and contributions such as assisting and participating in Non-Governmental Organizations(NGO’s) or Non-Profit Organizations(NPO’s) with either skill sharing, time, or money.

It is simpler when teenagers are taught from an early age how to care for the environment (human life, plant life, animal life) because all of this is part of the ecosystem that they not only live in but are also obligated to protect.

The famous adage “Let us leave this world better than we found it” is more relevant today than it has ever been. Believe me, it is more satisfying and fulfilling to see active youngsters contributing to the local area in which they live.

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