**This is a guest post in partnership with Glitter Network and it’s client. I am compensated for posting it.**
As a mom of three girls, I am constantly trying to teach them the value of money. This post is important and so I am happy to post it for you!
Budgeting is one of the most basic concepts of personal finance, but very few Millennials are budgeting savvy because nobody took the time to teach it to them when they were younger. This current generation is notorious for their wild spending habits and large debt loads, but your kids can avoid becoming part of these statistics if you teach them about budgeting while they’re still in high school. Using a user-friendly and free program such as Mint is a great way to get started, but if your kids need more convincing, then you can’t miss these three reasons why you should teach your teenagers how to budget:
Personal Finance Fundamentals
Think back to your high school math class, where you sat there and wondered how any of those confusing algebra and calculus equations would ever be relevant to real life. Unless you went on to become an engineer or math teacher, chances are you never did use those concepts again. On the other hand, one of the most useful, math-related subjects – personal finance – is not taught in most schools, which is saddening because it’s one of the most crucial real world skills to have.
Since schools aren’t teaching your kids how to set up a budget, track their spending habits, and reduce expenses in various categories, you can give your teenagers an edge over their peers by teaching them the fundamentals of personal finance at home. It’ll seem dry and boring to them at the time, but they’ll thank you when they’re older and (hopefully) financially secure thanks to the head start you gave them.
Money Doesn’t Grow on Trees
Kids and teenagers seem to think that money is a limitless resource that flows freely from their parents’ pockets, but teaching them how to budget can be a real eye-opener. Seeing the cold, hard facts laid out in an organized spreadsheet – whether you start with the family’s budget or encourage them to create their own personal budget – cements the idea that monetary income is finite, even if their list of needs and wants seems infinite like any other typical teenager’s.
Breaking up expenditures by category helps them see how much they’re spending on what and could help them scale back in one or two areas they think they’re overspending in. Budgets also encourage teens to stretch their dollars to get maximum value out of everything they buy. This can be done by shopping at cheaper stores, eating at home instead of constantly going out with friends, finding discounts on things such as movies, and so on. To help them maximize their savings, encourage your kids to check out coupon sites such as SumoCoupon and never pay full retail price for anything again, even if using coupons seems “uncool” to them at the time.
Lifelong Organizational Habit
Lastly, it’s important to teach kids organizational skills such as setting up a budget from an early age so they’ll make it a habit to follow for the rest of their lives. By teaching your kids about budgeting during their teen years, you’re setting them up for financial success later on because they’ll understand the fundamentals of living within their means and tracking their expenses, something very few credit card-wielding college students do while studying for their degree because nobody taught them financial prudence when they were younger.