Teach teens good money habits now for rosier financial future

Johannesburg – Helping your teenager to start good money habits now will serve them well for the rest of their life.

Learn to manage money for life

Money management is about learning how to earn, save, spend, borrow and repay money responsibly.

For the most part, our children learn about money by watching how their parents deal with money. Giving them small sums of money to manage teaches them money management skills.

Peer pressure and brands

Today’s teenager is increasingly shopping online, and with boredom at home, especially during the Covid-19 pandemic – it is easy to be lured by branded clothing, the latest cellphone or takeaway food. However, they need to understand that this spend, with debit or credit cards, directly affects their bank account. Peer pressure and social media can also be triggers for spending on unnecessary items. Rather than bringing happiness, these additional items can cause financial problems.

Cash is key

Sticking to cash can help a teenager to physically see how much money they are spending, rather than simply swiping a credit card that mom or dad will pay off. This will also help them to stop spending money they don’t have.

Set a savings goal

Help your teenager to set a savings goal for a big ticket item such as an electronic gadget or sports item. Encourage your older teenager to get a part-time job because working hard to contribute towards their savings goal is a great money lesson. Help them by discussing how much money should be saved, and how much should be spent.

From pocket money to part-time jobs

Giving pocket money or an allowance is another way to teach your children to manage money. You might want to consider whether part of the payment should be for doing household tasks.

By Kerry Sutherland

• Sutherland is a certified financial planner at Alexander Forbes

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