Financial Tips for Teenagers

Imagine having to take a surprise quiz after not reading the assignment. Pretty stressful, right? Now imagine having to maintain a good credit score without having any knowledge of how credit even works. Your understanding of finances plays a big role in your spending habits as an adult. That’s why learning money management skills in your teens is so important.

No need to sweat it! Here are 5 easy tips to help you navigate your finances while you’re still in school.

Start saving money

Just like shutting off the lights when you leave the room, saving money can become a useful habit that you don’t even have to think twice about. If you start learning how to save money now, that habit will stick with you in the long run. Whether you’re getting paid for a job, received a check on your birthday, or have an allowance – you should always save a portion of what you earn. The fewer expenses you have, the more you should save. Starting with saving half of whatever funds you have coming in would be ideal, and then you can adjust as you get older and your expenses grow.

Establish a credit history

Talk to your parents about starting your credit history before you leave home, and perhaps they can add you as an authorized user to one of their credit cards. This process will open a credit file in your name to help you build credit.

In the meantime, learn how to manage credit card usage and avoid debt. Take time to understand what a credit score means and how it can affect you in the future. And don’t forget to always pay your bills on time (that impacts your credit in a big way!).

Track how you spend

Take a minute to think about things you’ve spent money on this week. Did you get coffee or takeout more than you’d like to admit? This is where tracking your spending habits comes in handy. If you know where you spend most of your money outside of necessary expenses, you can find alternatives and work on changing your habits. Instead of getting an iced coffee every morning, instead get yourself a to-go mug and serve up some iced coffee at home.

Use your student ID

One of the best perks of being a student are all the deals you receive. Having a student ID can get you access to big savings on Amazon Prime, concert tickets, events, groceries, movies, travel, subscriptions, electronics, and more. Just ask if there’s a student discount!

Learn to earn money

It’s always a good idea to start earning money as soon as you can. Even if it’s babysitting once a week, starting to make money now will help you grow your independence and freedom. Want to go on a trip with your friends this summer? Find a job you can work after school or over summer break, and start saving what you earn in advance of the trip.

Talking finances may feel overwhelming at first, but there are always resources available to help. If you want to begin your financial journey and start your credit off strong, our financial experts are here to help. Contact us to get started or stop into your local branch to speak with a representative today!

4 Easy Steps to Raising Money-Smart Kids

Human beings may be destined to do everything the hard way. Consider teaching kids about money – parents can do this quite simply, following a few guidelines. Parents are hands-down the most influential force in any child’s life, and studies show that this extends to money management. Yet, the money talk still doesn’t happen in many U.S. households.

Meanwhile, we have a global movement to bring financial education into the classroom. Too many kids go to college or get their first job without a basic understanding of budgets, debt, and saving.

Jonathan Clements is one parent who has made a big effort at raising financially literate children. A former personal finance columnist at the Wall Street Journal, Clements is now the director of financial education at Citi Personal Wealth Management. He started family money lessons at age 5 with his children, who are now twenty-somethings with enviable money management skills.

Clements believes there are four simple guidelines to raising money-smart kids:

  1. Make them feel like the money they spend is theirs. One way to do this is pay an allowance, explain what the money is for and never give in when they ask for more. “The first rule of parenting,” Clements says, “is to never negotiate.” With young children, play the soda game. When you eat out, offer $1 if they drink water instead of a soft drink. It’s shocking how often they take the $1. Pay allowance to a bank account so that they must make a withdrawal before they can spend.
  2. Tell family stories that illustrate money values. Clements’ own grandfather inherited and squandered a small fortune. He says he grew up hearing the story over and over from his parents; it ingrained in him and his siblings the lesson that money spent is not easily replaced. Share stories about your humble roots or how you struggled when starting your career. That way your kids will understand they must work to earn their lifestyle.
  3. Lead by example. Even if you are not a financial whiz (and who is?), you can set a good example by paying your bills on time and staying out of debt troubles. “If your kids know you’re up to your eyeballs in credit-card debt, they aren’t going to pay much attention to any wise words you might have about managing money,” Clements says. “Your kids are more likely to do as you do, not as you say.”
  4. Manage expectations. In their teens, Clements’ kids clearly heard what Dad would and would not pay for as the kids reached adulthood—how much he would pay toward college, what kind of support they could expect after college, and how much he would pay toward a wedding. This gave them a realistic sense of what was coming and there were “no bruised feelings” later. 

And there you have it. The hardest part may be consistency with your message and, for some, staying out of money trouble themselves. That’s all the more reason to commit to a plan like this, which will benefit you too!

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