- Show them how to track their spending Hopefully, you already have some financial discipline and can get your teenager to shadow your habits with these: • List your regular monthly bills such as: internet service, utilities, phone bills etc. • Track the ‘small’ amounts you spend on impulse buys, snacks etc. • Now that you’ve seen how you spend your money, look for ways to save by cutting back on some things such as: subscriptions, commuting, home renovation, car repairs etc. • Set specific goals for the money saved, such as building an emergency fund, increasing your retirement savings or paying off debts.
- Show how to be a smart consumer. In a world where advertisers constantly bombard us with advertisements, smart consumers know to research thoroughly, read online reviews, compare alternate products and compare prices as well in order to get the best deal.
- Teach them to borrow responsibly. In life, the need to borrow money is likely to arise. Let your child know that sometimes, adults borrow money to achieve large financial goals, such as to buy a home, a car, or even to finance a business. Help them understand that borrowing money comes with responsibility in order to avoid unnecessary debt. If your teenager asks to borrow money from you, lend it to him with interest – this will help emphasize the importance of borrowing responsibly.
- Explain monetary and non-monetary assets Non-monetary assets are assets in which the right to receive a fixed or determinable amount of currency is absent. This is the distinguishable feature between non-monetary assets (copyrights and patents, goodwill, inventories, property, plant and equipment) from monetary assets (cash, bank deposits, and accounts and notes receivable) which can be converted into a fixed or determinable amount of currency. It is important that your child knows that both form of assets is equally important.
If you want your child to have clean bill of financial health, then start teaching them these financial lessons today. Do you have any more useful tips? Share with a comment below or reach out to us with any feedback on Twitter: @StanbicIBTC or Facebook: fb.com/StanbicIBTC