AdulTeen 101 - Money Matters
Apr 14, 2022Saving Strategies
As parents, we always strive to make sure our children are whole. We want to set them up for the best when it comes to mental, physical and financial health. However, when it comes to talking about saving and establishing strong money habits, it may be difficult to know where to start or who to trust. As our children transition into adulthood, it is especially important to model and instill healthy financial habits to help them continue to make sound financial decision in the future.
Here are some bases you want to cover when talking to your teen about money.
Saving and Spending
When it comes to saving and spending, the key is to have your teen understand the difference between wants versus needs. Understanding this crucial concept will make it easier for them to identify what they truly need or what they just want. Any money your teen earns or receives whether it’s from a job, chores, or birthday money should be accounted for to the very last penny. Separate accounts or sub accounts should be created to clearly identify what is allocated for savings, spending, or even donating. When it comes to savings, the recommended amount should be at least 20% or even more if possible.
When it comes to spending, a budget will be your teen’s best friend. A budget will help them see where their money is going each month or week, and also help them identify areas where they could scale back their spending. If your teens wants professional help, we offer free certified financial coaches who can help your teen craft a budget they can stick to, along with many other services.
If giving back is important to your family or your teen, your child may consider setting up a donation account to make deposits to. If they can’t give back monetarily, they may consider volunteering to help their favorite cause.
Paying For School
There are so many unique and new job opportunities out there that might interest your teen. No matter what they choose, it’s likely that there may be some educational or technical/training requirement for it. With increasing tuition costs, it’s important to start those conversations about paying for school sooner rather than later. Whether its college or trade school, you can expect to see a nice price tag attached to it. HAPO offers the LIVENOW platform to help you and your teen plan for their future with exploratory tools, budgeting calculators, financial aid tools, scholarship opportunities and more.
Investing For the Future
Retirement is probably the last thing your teen will be thinking of when joining the workforce, but it is an important part of their future! Starting a retirement plan as soon as possible is the best thing anyone can do no matter what their savings strategy may be. This is true simply because time is money. The longer you have a retirement or savings account, the more interest you will earn. In addition, with compound interest your savings will earn more because of the interest you earn on both your original investment and the interest you keep accumulating thereafter. Depending on when your teen starts saving and how frequently they make deposits, they could become a millionaire someday. There are different saving vehicles to choose from and there is no one-size-fits-all plan. Come see one of our Financial Professionals, offered through CUNA Brokerage Services, Inc. today for a rundown of the different options.
Remember, if you need additional information or a personalized game plan, stop by your nearest HAPO location or give us a call. We have various free resources available to you and your teen. Now you can show your “AdulTeen” some money moves.
Kandy Bowlsby
Financial Education Manager | HAPO Community Credit Union