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Financial Fitness For Teenagers
Making Your Money Work For You
If at all possible, try getting paid directly into your bank account as opposed to receiving cash. This will make it easier for you to curb your spending, especially if you leave your bank card at home. By setting up a daily limit to your spending, you will limit the amount of times you swipe your card a day, should you need to carry it with you every day.
When you live off the remainder of your money, it will be so much easier to budget. The first 10% of your money should go into giving. Whether this is to a local shelter, a charity or a needy family, by giving away your money expecting nothing in return you form a foundational building block in owning your money, not letting it own you. The next 10% of your money should go into fixed savings. This is money you don’t touch for any reason other than the most catastrophic disaster or in a case of life and death.
Don’t Start Your Debt Journey Prematurely
The temptation to borrow money from mom and dad for the latest gadget is immense, but by curbing your desires and saving up for it, you will set your debt habits up for life. Discipline with your money is not something that comes naturally, it’s an ability that is learned. The more you put aside your immediate wants and focus on your future needs, the effort it takes to be disciplined with your money becomes easier.
Create An Additional Income Stream
Simply just getting an income and blowing it on entertainment or clothing means that you’re missing out on an opportunity to generate more money. Be careful of “get rich quick” scams and rather invest in things that may serve you well in the future. These things could be photography equipment, editing software, sound desk equipment, carpentry tools or anything that could be used to generate income. This is not to be bought out of your savings, you should be saving for this separately.
Budget For Entertaining
Earning an income at a young age could mean that you’re the nicest guy in the room and you feel obliged to buy everyone dinner or pay for movies all the time. It is important that you are generous, however, it is also important for your friends to start paying their own way. It will make it very hard on them later on in life if they expect everyone to pick up the tab for them. If you set yourself a limit, you can still afford to be generous and have a good time without depleting your funds.
Create A College Fund
Whether you are a candidate for bursaries or scholarships or not, saving up and having some cash available can make a substantial difference in your quality of life at campus. Your needs will change and having some cash to accommodate these needs will mean getting the microwave for your dorm room instead of the toaster oven.
During your teenage years, it’s important to live life to the full and have as much fun as possible. Starting to take responsibility for yourself from an early age will just make the transition to adulthood so much easier. Working well with your money is a skill many people learn too late in life to their detriment.