The raging Covid-19 pandemic has opened more job opportunities for teenagers as the older generation takes a break from work to reduce the chances of contracting coronavirus. Money comes with responsibilities, and without proper guidance, the teens may blow the cash away. Keep reading to get ways that can help your teenager to spend money wisely.
Plan A Budget
A budget helps to know where and when to spend money. Teenagers need guidance on how to handle their first checks. It will help if you guide them to write down their needs and luxuries. When they get paid, remind them to take care of needs like clothes and gas first before going out for that movie. Budget-making will instill financial responsibility into the teens.
Cases of teens making investments that garnered them huge profits after some time are not rare. Teenagers who used their summer earnings to purchase bitcoins cheaply a while back are now smiling at the bank. You can help your teen to make intelligent investment choices like the stock market. Let them put in small amounts of money and learn the ropes of the trade. They can also open joint accounts that will enhance their financial growth.
Chip into Buy Necessities
If the teenagers are raking in some fair amounts of cash, let them take care of some bills. If the car runs out of gas under their use, let them pay for the refill. Hold them responsible for actions that lead to wastage. Through this, you will instill financial discipline into them while teaching them the importance of paying their bills.
Save For College
Encourage your teens to save a third or more of their total summer earnings. They should put the money into a savings account where they cannot access the funds quickly. The savings will come in handy in their college days. Remind them that they will have little time to work in college, and their expenses will be ballooning. Saving will help them to be frugal with their money and learn to weigh options before spending money.
Open A Retirement Account
It is never too early to save for your retirement. A teen should open an individual retirement account (IRA) and start putting money in it. In the future, when they want to hang their boots from work, the amount of money in their retirement accounts will guarantee them a comfortable life. Additionally, money withdrawn from IRA to pay college fees and buy the first home is tax-free.
Make Charity Donations
Giving away money for charitable causes is an excellent way of showing compassion to the less fortunate. Motivate your teenager to explore national and local charity organizations and select one which matches their passion. Let them donate small amounts of money; this will help instill the virtue of giving in the teenagers. If they are penniless, the teens can volunteer and dedicate their time to cleaning homeless shelters and hospitals.