Personal Finance Tips: Age 15-18 Years,How To Raise Money Saavy Kids


Hi Friends, 
we have already discussed the ways by which you can raise Money Saavy kids In the age groups 4-6 and 7-14 years. 

Let us expand the discussion to the young adults about to enter the college system or workforce.

If you have instilled a habit of saving and intentional spending in your kids at a young age, you are already on firm ground.

It is most likely, then, your kids will avoid the pitfalls of running into spiraling consumer debt and think hard about college tuition loans.

Generally, this age group 15-18 is already conditioned by the factors of parenting and culture. As Parents, you can help them mitigate or completely avoid unnecessary financial stress.

Tips to help your kids to become financially comfortable and successful:

1● Tell them the difference between good and bad debt. 

This will help them avoid a lot of financial stress and free them from the shackles of a hampster wheel lifestyle. 

Examples of good debt: A mortgage or long term home loan.

If you want to own a home for living or rental income, a home loan can be beneficial. 

An education loan that will help you get a college degree and land you with a decent job.

Here again, you have to be careful not to go beyond your means. 

If these are explained to the young kids, it will help them understand the pitfalls of debt and avoid making mistakes. 

Examples of bad debt: An expensive car loan.

A car is a depreciating asset. Though, in some cases it is essential to own one to get to work and running errands, teach them to purchase decent  cars that can be paid off within 5 years. 

If you are considering a second hand car, make sure to get if checked thoroughly, or you might have to shell out a lot of money to get it fixed.

Personal loans,(Consumer debt)

Teach your children to avoid taking up Personal loans for financing gadgets, travel, vacations or consumer goods.

If they are made aware of these early in life, they can make informed decisions and steer clear of unnecessary burden of debts.

2● Explain the use of Credit Cards and Debit Cards.

When your kids are either entering college or the work force, companies and banks will lure them with various Credit Cards. 

It is Human behavior to get tempted by the vast scope of easy money and spending mindlessly on designer clothes, bags, footwear, latest electronics, mobile phones etc.

I allure of Credit Cards is such that very few are able to avoid it. Teach your children delayed gratification. Also, teach them to use Credit cards only if they can make a full payment at the end of every month. The concept of paying a minimum amount can lead to a very high interest rate and send you spiraling into a huge debt. 

If the kids have this information, at least they can use discretion while using it.

3● Instill saving habits in your children.

Keeping up with the Jonneses and Comparison is a killer of joy.

Teach them not to compare their life with others. We have to run our own race and life is much more than material and consumer objects. 

Teach them to keep away from peer pressure. If your kids are surrounded by friends who believe in pub hopping, eating in expensive restaurants and shopping sprees, then they should be advised to stay away from them.

4● Instill healthy habits 

 Teach them the importance of routines,exercise, good sleep, nutrition and healthy relationships. If they grow up seeing you following a healthy lifestyle, they will definitely emulate your life. What better gift than a sound, balanced, healthy and confident upbringing. These are the real treasures and not insignificant consumer durables that will anyway become obsolete in a few months. Your contribution to their healthy mental makeup will remain with them forever. 

5● Familiarize them with investment 

Teach them about simple investment tools. You can take the advice of a professional planner, in case you feel the need. 

They should be taught the importance of saving and investing. We all know the effects of inflation in eroding our wealth. Only by investing  they will be able to beat inflation. Teach them to start with a small amount, be consistent and think long term. 

They should be advised to avail of all government instruments for saving. Different countries offer very safe retirement financial schemes where the contribution is matched by the employer. 

This will help them to build wealth and have a decent retirement corpus. 

As Parents and guardians it is your duty to ensure that the children should be given a sound financial education. As home is the first school, Instill healthy habits in your children by example. In today’s very volatile economic environment, these tips become an absolute necessity to avoid financial and mental stress. 

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