16-year-old Eva Baker of TeensGotCents has financial savvy to spare—and she’s sharing it with us in today’s guest post!
A 2011 Charles Schwab survey found that 35% of teenagers do not know how to balance a checkbook, 28% are already in debt (owing an average of $252), and 76% are saving for college. Oh, and while 59% of parents talk to their teen about cleaning their room, only 46% of parents teach their teenager about smart money management.
Adults may think that teenagers don’t care about personal finance or learning how to manage their money well, but I have not found that to be true. Most of us are interested—particularly when we face the reality of college costs and the fact that many parents are simply unable to put their kids through school.
86% of teens want to know how to handle their money!
Do you want to know more about money management and just have no idea where to start? Good! Because I have a few ideas for you!
Ditch your debit card.
If you have a debit card, you may want to put it away for a while. Sure, you may have $900 in your account, but isn’t that money supposed to be for college tuition? If you have easy access, it might be a problem. At least move it into a savings account that is not connected to your card and consider using a cash-only system for a while. You truly have to face reality when you use cash instead of zipping that debit card!
Have a savings plan.
Do you have a specific plan for saving your money? Have you written it down? Sticking to a plan is much easier when you have written down the specifics. What are you saving for? A car? College? A new iPad mini? How much money do you need for each of those categories? Once you write everything down, it will be much easier to save your money instead of buying a new purse—and those fabulous matching shoes.
The envelope system.
One way to manage your money is to use an envelope system. Just take a regular envelope and label it by category (such as “college” or “car,” etc.). Whenever you earn or are given any money, you put it into one of your envelopes. I have a car, college, retirement, clothing and spending envelope. This simple system helps me to make good decisions with my money because it forces me to be purposeful. If I don’t have any money in my spending envelope—guess what? Yep, I wait until I do!
Being responsible with your money now can and will make a difference in your future. Be sure to educate yourself about money now so that you can avoid the mistakes that so many people make.
Eva is a high school student passionate about preparing for her financial future and helping other teenagers prepare as well. When she isn’t rock climbing at the gym or pinning ideas for her non-existent wedding, she documents her financial journey over at TeensGotCents.com. Find her on Facebook, Pinterest and Google+!
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