If you are a parent, it is unavoidable to think about your child’s future constantly. Since you cannot always teach them everything, the experiences they have hold very high value in their lives. Only through these experiences do kids gradually become responsible adults. But there are some things that you can still teach your kid.
Among the basic skills, one of the primary things you must imbibe in your child from an early age is financial responsibility. Finances and understanding investments are significant especially when they reach their teens. Because the more early you start, the better your kids get at managing their finances. Giving them the liberty to enjoy and use their money from a younger age can help them become more serious and responsible as they progress.
This has been made easier today with the growth of NEO banks for teenagers, where parents can monitor their teen’s expenses and determine the limit of the amount they spend. Though the fundamental responsibility of actually managing the finances will still be in your kid’s hands. To aid this, the teen must learn the basics to managing money responsibly, so he gets a fair idea about saving and logically spending it.
Still feel that it is too early to encourage your teens to save money?
Let’s see how it’s not :
1. A Key Financial Skill
As already highlighted above, managing your finances never happens overnight. People learn to manage their investments and money-related issues with time. There will be a lot of hurdles in the pathway, but with each challenge, you prepare your kid for a greater experience. Your kids get the idea of managing the expenses while saving money for their future.
Understand that saving will always be a fundamental financial skill. No matter your kid’s age, he/she needs to plan everything to construct a bright future. It is all about managing the current expenses for long-term wealth-building.
Remember that without such learning discipline, diligence and planning, at this crucial age, it will be impossible for any individual to manage their expenses and investments even in the future.
Also Read: 5 Smart Tips for Saving Money on Insurance Costs
2. Independence And Fostering Self-Reliance
Another reason on the line as to why you need to teach your kids about finances is that only successful savers travel the path to gain the ultimate financial independence. It helps them foster self-reliance and become more responsible as an adult.
The more they start achieving realistic financial goals, the better they get at developing self-confidence and gaining the power to direct their lives positively.
Furthermore, with the motto of instilling a sense of financial independence in the Gen-Z, the NEO banking concepts offer exclusive banking for teens options to further push them ahead towards their independence.
3. Discipline About Sensible Spending
Why do people keep losing money in investments, even after reading many reviews and thorough research? That is because, in most cases, people forget to discipline themselves regarding sensible spending. And remember, this is a habit that one cannot change overnight.
Every skill requires proper practice, and it grows with time. Whether negative or positive, any person would need time to master these skills. So when you start encouraging your teenager to save money and do mindful spending from earlier on, they get habituated with this practice.
Discipline is always essential, especially when reinforcing a good habit by practicing it multiple times. For example, budgeting is an old habit that you need to foster as early as possible in your kids.
And the best part is, as time progresses, the more they understand their power about investing and spending, the better they will get at managing the funds, all allowing them to build a strong future ahead.
4. Earning Early
Learning to save is essential. But what comes before saving money is earning money. In most countries, teenagers are now involved in part-time jobs where they get paid fairly. If not jobs per say, internship opportunities in many organizations, specially young start ups are widely available and a big trend. This concept of working and earning is not only enticing but very enriching for teens too.
While teens have started earning early, it is equally, if not more essential to teach them to manage that hard earned money well from early on too. Rather a must.
This can be further smoothed and secured by getting them registered to NEO bank for teenagers!
5. Being In Control
Kids always want to grow up fast and become adults. It is a fascinating concept for them though without realizing the societal pressure that tags along to become responsible and independent. However, once they learn to deal with expenses, they become in charge of their lives and to a large extent can make decisions for themselves.
So, start putting finances to them as a means of becoming a better version of themselves. Also, highlight how they can be in total control of their lives by learning how to manage their money. Many Neo banks for teenagers run various reward modals that can further be of great help in ethically enticing the teens.
6. Emergency Fund
Did you think about creating an emergency fund for your teenager? If you already thought about it, why not let them participate in developing this fund for them? An emergency fund is the saving space from where your kid can get adequate help whenever in financial distress.
Well, the emergency might not be a serious one. But you can always highlight how it gives the independence to the kids to do their activities on their own and acts as a solid backup for if/when things go south. Also, keeping aside an emergency fund can help your child pay for their expenses and never worry about asking for money from anyone.
7. Proactive Is Always Better Than Reactive
Lastly, it is crucial to understand the differences between proactive and reactive money management. Before your kid prepares to leave for college, ensure that he understands these following concepts pretty well.
Proactive money management is about making financial decisions today to create a healthy, secured future. It will positively affect the finances later and help your teenager avoid any potential financial pitfalls.
On the other hand, reactive money management refers to always waiting for the situation to fall on you and then deciding to come out of it. It might be spontaneous but not profitable for a secured future. Of course, there will be situations where your kid has to make reactive money decisions, but being proactive and mindful about savings can always help.
Also Read: 7 Best Investments Ideas While You’re In College
How To Encourage Kids To Save Money?
Now that the above arguments have hopefully convinced you to encourage your teen to to get their hands and mind on finances, you must be looking for ways to do so. The answer is simple, and has been mentioned multiple times above. NEO banks for teenagers!
The entire NEO banking concept is all about offering customized banking facilities for all. These digital banks are available 24*7 at no or minimal charges. In addition, they offer exceptional banking for teens, where parents can monitor the expenses while the teen still gets to be in complete control of their money. So, don’t wait up and embark your not-so-little-one on a journey of understanding & managing finances, starting with their very own NEO bank account.
