Financial freedom, financial security, and financial prowess are feats which some people spend decades working to achieve. Like most things in life, the earlier one begins to practice, the better off they will be. In the case of financial independence, teenagers who learn advantageous skills prior to adulthood are more likely to succeed than their unaware counterparts who have to learn via various mistakes.
Financial missteps can be quite costly; recovery can sometimes take anywhere from months to years to decades. This is why having helpful information and knowledge in one's arsenal at a young age almost always serves people well and helps them to avoid falling into some of the most common financial pitfalls.
Open a Checking and Savings Account
One of the best ways for teenagers to become acclimated with money, finances, and managing funds is by opening a checking account and savings account; this can be done at a local bank or credit union, as cited by
. Not only will this help young people familiarize themselves with building up money in these accounts, but they will also have to exercise discipline. Avoiding overdraft fees, making ongoing deposits, learning how to use an ATM, putting money aside in a savings account (and leaving it there!) are skills which every teenager can benefit from. These are critical skills which young people will have to master and implement once they enter adulthood. The earlier they start, the better off they will be when it's time to enter the real world.
Differentiate Between Needs and Wants
Everyone has needs and wants; this is applicable regardless of whether one is a teenager, full fledged adult, or senior citizen. However, the ability to differentiate between needs and wants is absolutely paramount to financial success. Rent, utilities, groceries, phone bills, etc are some of the things which fall into the category of needs. Eating out, shopping, going to the movies, traveling, etc are wants. Now, there is nothing wrong with having wants and desired experiences. They are a part of life; one of the greatest feelings in the world is being able to comfortably do as one pleases without having to stress over funds.
Nevertheless, there much always be a clear mental distinction between needs and wants. Moreover, teenagers should understand that they have the obligation to make sure their needs are covered and taken care of first and foremost. Once these matters are settled, they can then move on to addressing their wants.
Take the Process in Stride
At the end of the day, there are countless tips for teenagers who are seeking financial advice. However, similarly to opening a checking account/savings account and differientiating between wants and needs, taking the process in stride is also of great importance. Being as prepared as possible is great, but some things take time. Very few individuals will start off their adult life with a complete awareness of how to effectively manage money and make the best financial decisions. Nevertheless, following the steps mentioned throughout this piece will certainly prove to be beneficial.
Authored by: Gabrielle Seunagal