Teenage Money: Distinguishing Wants And Needs
So many adults today struggle with their finances. You only have to turn on the news for a few minutes or pick up a newspaper to see stories about how consumers today are struggling with high balances on their credit cards, are taken ten or sometimes even twenty years of the adult life to pay back student loans, and are losing their homes because they cannot afford to pay the mortgage any longer. On one hand, the economy during recent years has been a mess. However, most adults today will also tell you that they’ve made some wrong moves with their finances over the years. If you are like most people today, you likely have learned a thing or two about spending, saving, and investing that you wish you’d known early on in your adult years. How different your life would be!
Share Your Wisdom
If you are the parent of a teenager today, you no doubt want your child to have the best life possible right from the get-go. You’ve spent years of your teen’s early life sharing your wisdom on everything from sharing and great study habits to more timely things like car maintenance and how to balance a checkbook. These are definitely lessons your teen can use in adulthood, but providing your child with a solid financial education before he or she leaves the house is perhaps the greatest gift you can provide.
Wants vs. Needs
If you are honest with yourself, you likely can boil down the lessons you have learned about finances to one major and very important theme. That theme is, of course, understanding the difference between wants and needs. When a person understands this concept and applies it to his or her life, it can have a profound difference on spending and saving habits. This is a lesson that can help your child avoid that impulse that so many adults have to spend frivolously and charge up their credit cards all with the goal in mind of “keeping up with the Joneses.”
Are You Walking the Walk?
It is, of course, one thing to talk to your teen about the difference between wants and needs, but it is another thing entirely to walk the walk. Take a moment to consider your own lifestyles. Kids learn quite a bit by watching how their parents live their lives, and you may want to consider what spending habits they may have learned by watching you. If you are taking a look at your own financial lifestyle and are less than pleased at your own stark reality, the good news is that it is never too late to change. In fact, talking openly about things like keeping your car for a year or two longer because you don’t really need a new car right now or not buying that fancy new pair of sneakers because your other ones are still in great condition are small things that can make a big impact on your teen’s thought process where spending habits are concerned. Go a step further than this, too, by talking about what you could do with that money you don’t spend on a new car payment each month.
It’s Never Too Late
The earlier in life you start applying this “wants vs needs” mentality in your child, the better the results will be. However, even if your teen is backing up his or her room this week and getting ready to move out of the house, it is never too late to start ingraining this mental thought process in your teen’s head. Even into your child’s adulthood, he or she may see that you are downsizing to a smaller house because you don’t need that larger space now that your nest is empty, or he or she may see that you are driving an eight year old car because it still runs great and you’ve taken good care of it. Oftentimes, it is our actions as parents that speak louder than our words.
One thing is for certain, however, and that is the fact that teaching your child this lesson will certainly help your child have a happier financial future throughout adulthood.
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