By: Vicky Livesay
With the struggling economy, a lot of people worry about their finances. Getting loans for cars or homes has become more difficult and the title loan business has increased despite the riskiness. Saving money has never been more important or more difficult.
Many adults and teens are coming to the realization that learning about money and how to manage it can save a lot of heartache. The State of Tennessee agrees and so do we. A one semester class in Personal Finance is now required for graduation and it may be one of the most beneficial classes we offer.
In a 2011 survey by the investment corporation Charles Schwab, 86 percent of 16-18 year-olds said they would rather learn about money management in school than make financial mistakes in the real world. Motivation is more than half the battle.
Those who are invested in learning about a topic are more likely to take the message to heart. Of those students surveyed, 93 percent also said they have seen the recession impact their own families. That is huge motivation.
So what do teens need to learn from a personal finance class? The number one thing may be the importance of saving for a big reward. Need a car? Save your money. Want an IPad? Save your money.
Having money in your pocket is tempting, so open a savings account, draw some interest on the account and you got it save your money. That car or IPad will still be there when there is enough money to make a purchase.
The second lesson is to avoid debt and making accidental purchases. Cell phones can be a danger here, depending on the plan. Running up $200 worth of text messages is not all that uncommon in this world and the excuse but I didnt know doesnt work on cell phone providers. Knowing these dangers are lurking in the real world can help prevent them.
It may seem important to have the coolest car, the nicest clothes, or the most popular shoes since everyone else does, but this leads to lesson number three. Its just not that important to keep up with the Joneses. Teens shouldnt let jealousy drive their purchases.
Jealousy makes it easy to break rule number two (avoid debt) and when in doubt they should always refer back to rules number one (save your money).
The final rule is that parents do know some things. Even though teens may not be clamoring for advice from parents, parents should share anyway. Believe it or not, sometimes it sinks in even when they dont appear to be listening.
Share your advice. Share your mistakes. Let them see where the familys money goes. Lights dont magically come on when you flip a switch. Water doesnt automatically pour from the faucet. Every family has bills to pay and teens need to know that.
And besides, imparting good money advice may benefit the family as well as the teen. Parents need to save money for their own retirement. Bailing teens and young adults out of financial messes puts that in jeopardy.
Mr. Joey Lewis and Mr. Doyle Phipps are working to educate your teen, but they can always use your help. Talk about money. Discuss the difference between what you want and what you need. Show them how to save money.
Having a more financially secure teen leads to being a more financially secure adult. That makes life happier for everyone.