There is no such fixed time to learn any life skills for the future. But still, learning financial education from a very early age can save the end effectively. Along with academic knowledge, it is also important to learn how to save for the future and how to secure it. Learning to budget is a crucial skill that ensures one manages money from the very first day.
This life lesson is very important, especially for teens. Teenage is a stage where people get ready for practical life, and soon they will enter the world where they need to handle their own money, raise a cash loan in times of need and more. If there is no knowledge of financial skills, monitoring financial problems can certainly be problematic.
If teens can learn financial expertise and implement it in their everyday life, they will be self-sufficient. They will learn how to spend, where to spend, how to have better credit scores, how to start investing, find loan app and lots more things. But before all of these, teens must learn what is needed and what is wanted.
Difference between needs and wants
Needs are necessary for spending your life or to upskill yourself effectively. On the other hand, wants are something that is not necessary, but you need that because of extra features or extra luxury.
For example, you need to buy a laptop because you do not have one and you need the computer for higher studies. It is called needs. But if you already have a laptop but want to buy another one with an unnecessary extra gaming feature. This is called your wishlist or wants. Differentiating between these two can help a lot to understand the financial skills for the future.
So, are you interested in learning financial tips and strategies for teens? If yes, go through these words, and you can learn to be financially strong from a very early age.
Tips for financial planning from the teenage stage:
- Learn the source of income of self or the family:
The first step is to learn about how much you will make overall. No matter what, you get your money from your parents or your side hustle. Calculate all those amounts to get the total amount of your money. Only then can you jump to other decisions like spending or saving?
- Budget categories from the early age:
Create a budget category from your early days of college or higher school. Divide it into the saving and spending categories. The saving category means your savings account or college fund. The spending category will include fuel charges, mobile bills, food expenses, etc. If your spending categories go beyond your funds then you need to look for personal loan sources to manage it.
- Healthy strategy for finance:
Maintaining a financial strategy will figure out how much money you can allocate for savings or how much loan you require to meet your needs. You can keep a fixed amount of cash aside instantly after getting your pocket money or side hustle earnings. Also, follow the 50-30-20 rule. That means 50% is for necessary expenses. 30% is for unavoidable costs, and 20% is for savings.
- Goals oriented finance:
Create your own goals, where to go with your money, or how to start investing. When you have a goal with your finances, you can easily follow the right path of financial planning.
- Taking lessons from wrong financial mistakes:
Humans make mistakes. But it doesn’t mean that you should stop after making mistakes. Rather you should learn more from your mistakes. It can give you practical knowledge.
- A side hustle can work:
You can start freelancing, or any side hustle if you want to earn more. It can be blogging, being a tutor, baking, etc. You can make some extra cash with these kinds of activities.
- Spend less to get more:
Remember that the more you spend, the less you save, and vice versa. You need to spend less to save more money from your school or college days.
- Avoid peer pressure:
Having something or spending on something out of peer pressure is very misleading. You should spend or invest where you should do or where you can do. Besides, following the latest trend in everything can also be pricey. You must pay for something urgent or essential for your daily life.
- Ask for professional help:
Usually, teenagers need help understanding what steps to take or where to invest their money. Also, how to spend or what to spend are other problems too. In these situations, it is important to take the guidance of parents or family members. You can also take the help of any financial expert who will provide 360-degree advice. In this way, diving deeper into financial knowledge will be easier.
- Investment from an early age:
Investment may seem like a tough word at first. But it is one of the most interesting and beneficial financial steps in everyone’s life. It is possible that you do not have much money for investment. No issues at all. You can invest a very small and affordable amount in the first investment. You can easily get practical knowledge of the acquisition through a very small initial investment.
- Advantages of being a student:
Being a student can help with financial thoughts. As a student, you can use fewer credit payments in some places. Also, some of the apps like Nira can offer you personal loans to meet expenses. Always look for those offers so that you can overcome financial difficulties easily.
You have come so far. You should understand how to manage money from a very early age. It is a lifelong lesson that can keep you from being financially unstable.