Imagine if all your income was disposable, and you had very few responsibilities. It would be a real challenge to develop the disciplines required for long-term financial health. This is where a lot of teens start when they’re introduced to money.
As parents, it’s our job to instill a healthy attitude about money while equipping our kids with skills to manage their finances. Our teens are going to make some mistakes. But if we’re paying attention, we can help them make mid-course corrections and keep them on track.
Let’s look at four mistakes that teens make when managing their finances.
- Spending too much on special events
When it comes to events like concerts or sporting events, kids feel a social pressure similar to adults. Parents can help teens negotiate their spending on these events, showing them how to get deals and create a special evening that’s within their means.
It’s also an excellent opportunity to talk to them about financial peer pressure. There will always be a temptation to make financial decisions in an attempt to impress friends and families. The earlier we can help them recognize this tendency, the better.
- Not putting money into savings
Some kids are natural savers, but all kids need to learn to put money away. Unfortunately, a lot of kids will spend it as fast as it comes in.
Teens practice spending habits that they’ll carry into adulthood—so if they don’t learn to put money away when they’re young, they may struggle to make a habit out of it when they’re older.
Need a youth savings account that you can monitor together? Check out this option.
- Delaying understanding credit
Parents aren’t typically thinking about their teen’s credit, which could eventually be a bit of a problem. Believe it or not, in a few years when they actually need good credit to rent an apartment or buy a car, they may not have it yet. At minimum, teach them how credit works.
But before going out and opening a credit card in your teen’s name, try a safer approach with a debit card. This will give them practice using a card responsibly, a skill they can use later to build their credit. And with the right debit card, you can also control the spending limits and monitor spending habits.
Looking for a teen debit card that you can control? Here’s a good one.
- Carrying cash
Carrying cash can make it easy to spend, lose, or loan money—and after it’s gone, there’s no real record of where it went. We live in an age when everything from music to banking is digital, and our teens needs to be prepared. They should know how to monitor their account from an app, make mobile person-to-person payments, use a debit card, and digitally deposit checks. That way, the cashless world won’t be a big puzzle to them later.
Start Young Savings and Spending Accounts from AdelFi help prepare your teen (and even younger children) for the world of digital banking. It’s the safe and secure way for them to learn the necessary skills required for managing their finances, and it gives you the visibility required to guide them through the process.
You can also visit the AdelFi Financial Stewardship Center to help them avoid common money mistakes. Together, you can explore how thoughtful financial decisions, guided by biblical principles, can prevent the pitfalls of poor stewardship. It’s a chance to equip them with the knowledge they need to handle money responsibly, ensuring they grow up understanding the importance of using their resources in a way that honors God.
