Personal finance is an important aspect in one’s life. The financial decisions you make determine the quality of life you have or could have in the future. To ensure that your future goals are met, you do proper finance analysis of your monetary status from time to time.
A study in Norwegian shows that home, car, and retirement plans are among the many goals of young adults. These goals motivate them to work hard and do proper finance management in order to save up or pay debts and bills. But personal finance awareness is not just intended for adults with their short and long-term goals. Every now and then, the younger age groups are subjected to situations which involve wise spending and budgeting. Teenagers, in particular, should have proper personal finance consciousness since they are at the stage where they start making choices for themselves.
Finance Assessment for Teenagers
Teenagers are technically still under the supervision of their parents but are given a little more freedom to start seeing the world. This, however, entails finance handling and decision-making endeavors. Personal finance is among the many points you could make your teenager understand. At this age, parents should encourage their teenager to find part-time jobs to make them understand how people work hard to earn. With this, they would learn the value of saving and not giving in to every spending whim.
With a part-time job, you could start letting your teenager finance some of his or her personal expenses. This would encourage your teenager to budget his or her earnings for weekly expenses such as gas and leisure. It is important to guide your child on how to do proper finance management to avoid being broke before and after each salary schedule.
Goal Setting for Teenagers
Along with budgeting, it is also important to teach your teenager how to save. Opening a bank account would give the teenager a sense of responsibility and pride for being able to set aside some money for future plans. Personal finance involves particular plan to reach the goals an individual sets. Making your teenager understand the value of smart saving for future goals could help him or her become responsible adults.
Finance Failure for Teenagers
Impulsive teenagers are still likely to deviate from the priorities you’ve helped him or her set. Somehow, he or she may give in to a spending impulse and lose the budget set for a particular time. While this may not be as great as missing loan payments and getting bad credit scores, it is still important to make your teen understand the consequences of bad finance handling. With the budget gone, your teen will have to cut back on other leisure expenses and miss some outings with friends. He or she will have to part with the car for awhile with the lack of budget for gas.
For both teenagers and young adults, proper finance management is a great factor to determine the kind of lives they will live in the future. Some goals may change along the way which is why frequent monitoring and assessment are also important components in personal finance planning.