Five Ways Teen can become Financially Savvy

Five Ways Teen can become Financially Savvy

Dean Esmail, Junior Staff Writer

The teenage years may be the first time young adults start to earn their own money, and establishing good financial habits now can benefit them well into their future. However, many teens today have very little knowledge when it comes to finances. In fact, according to research by the OU’s True Potential Centre for the Public Understanding of Finance (PUFin), a staggering one in seven 18-year-olds is already in debt. Tony Dattilo, a junior at Hubbard High School, states, “Debt is a major problem that many teens, especially those in college.” Teenagers today may face many financial difficulties, but this writer is here to offer ways that students at Hubbard High can overcome these problems. Here are five solutions to consider:

  • Earn Your Money

Teenagers must accept the cold, harsh truth: Hard work is the only way to earn money. Getting a job is a great way for teenagers to experience the challenge of earning money, while also learning to make smart financial decisions with the income they receive. Anthony Trobek, a junior at Hubbard High School, highlights the benefits of having a job: “Teens should have jobs because not only are they a way for teens to make money, but they can also teach them responsibility and prepare young adults for the real world.”

  • Resist Over Reliance

If most teens are guilty of one thing, it’s that we oftentimes “borrow” money from our parents with no incentive to return it. This leads teens to think that their income is virtually infinite, and is based on their wants rather than what they can actually afford. Teens must learn not to become over reliant on their parents, as this is not practical when looking towards the real world of the future: they may not have their parents to hold their hands along the way. However, if a teenager must borrow money from a parent, he or she should at least have the intention of returning it.

  • Talk About Finances

Although teens may think that they know it all, chances are they probably don’t. Teens need to understand that one must work to earn the money that gets spent, and going into debt has consequences. By talking with responsible adults on smart spending or the dangers of debt, teens might be surprised at how much they can learn. Adults have most likely experienced financial problems in life that they could have avoided if they’d known better, and in discussing these issues with them, a teen  could prevent these negative consequences.

  • Save Money

A new gaming console just dropped today, and this particular teen has been waiting forever to buy it. He goes to the store and spends over five hundred dollars for an item that he’ll probably own for a year, until another one comes along that’s even better, and even more expensive. However, this young adult is not a kid anymore, and he/she must think practically. Is it really in one’s best interest to spend his/her entire allowance on something that will only provide happiness for a short time, or should this same teen save money and spread that happiness over a lifetime? Junior Cameron Resatar, states, “I save my money so I can pay for college, even though I would really like to spend it on other things most of the time.” Even though a teen might really want that new console, it might be better to save the money as it may benefit him in the long run.

  • Avoid the Dangers of Credit

Some teens may view credit cards as a necessity – something easy to carry around that gives one the freedom to purchase anything he or she desires. However, teens must become aware of the dangers these credit cards entail. Before considering a credit card, a teen may want to learn of the things they can affect such as credit score, and how they can affect one’s life later on. Credit cards may be a desirable item, but teens must be aware of the harms that come along with them. Paying off a balance each month is the surest way to avoid credit card debt.

All teenagers should learn to make strong financial decisions now, which will ultimately benefit them in the long run. Hopefully, this article helps to shed some light on ways to make smarter financial decisions, and prevent many of the detrimental financial dilemmas in life.