The carefree days of teens are not when you worry yourself sick with money matters. However, before hitting your twenties is actually the time to learn about money, a lot more than spending it on all you wish to fill your closets with. The money lessons are ought to be taught at a tender age so not only to induce saving habits but also to garner a culture of smart spending.
Here is what you need to know about money before turning 20:
1) It is important to learn budgeting at a young age
If you think it is alright to put it off for the time when you’d be completely financially independent, it is high time you ditch the theory. Before you hit your twenties and start minting money from a serious job, you need to know how to spend it and when not to. For that matter, a budget preparation always helps and has to be a learned skill, do so with your weekly or monthly allowance if you aren’t earning yet.
2) Credit cards aren’t magic cards
The very concept of absence of immediate responsibility which comes with the use of a credit card has to be something taken seriously, especially for the young adults before their twenties. However, it is often advised, and very rightly so, that credit cards shouldn’t be handed over to teens
unless it is absolutely necessary. The concept of buying with less or no worry to pay later is something detrimental when it comes to learning about money in early years.
3) It is important to learn basic concepts of banking
Almost all of the banks offer accounts for teenagers and that is one tool to use to learn about basic banking principles. The idea is to learn about the significance of money and about the regulations and restrictions implied by financial institutions which one has to understand anyhow.
4) Saving always helps
No matter how tempting it is to take charge of all your money at once and spend it on all what you want without the mere consideration of consulting an adult; it is a way better idea to save it. Saving, undoubtedly, works in the long run whether you need to pay for your college tuition or any other emergency need arising, safely stashed away money helps in various manners. It is something you need to know the earlier the better, so your twenties isn’t the time you are only experimenting with finances.
5) Differentiate between needs and wants
It is highly important for teens to get to grasp the concept and difference between needs and wants and act in accordance to the same when it comes to their spending habits they are in check by themselves since as young age.
The idea is not to turn your young adults into miserly people but to make sure they know where they are spending the hard-earned money
and to help them make smart decisions and learn about the various types of spending habits and their outcomes. It is also essential for people to learn before their twenties about browsing their investment options and know what serious stuff they could do with their money.