(BPT) For most teens, high school is an exciting time for those sweet, first tastes of independence: first dates, first cars, first paychecks. As low-stakes as some of these milestones may seem, there’s one area that deserves some extra attention in every family: personal finance. Today’s teens are spending $260 billion a year in the U.S., yet only 17 states require completion of at least one financial literacy course for high school graduation.
As soon as you start earning money or receiving an allowance, you should open a savings account. Parents and teens can decide together how much of the earnings should be set aside for savings.
Needs vs. Wants
When something fun comes up at the last minute it’s hard to say no. The best thing teens can do is prepare for situations that lead to impulse purchases. Start by making a list of needs and wants. Each month, plan for the things you need, and figure out how much is left over for the fun stuff.
Keep Track of Spending
Now that you’re aware of how much you need for necessities and what’s left over for the fun stuff, it’s time to start keeping track of everything you spend. Being mindful of every dollar you spend will help you understand your spending habits—and help you find ways to reduce your spending and save even more.
Build Good Credit
Money decisions you make even now as a teenager will make a difference later. Good credit is essential to getting a good rate on a car loan or leasing an apartment later on. To build good credit, always pay your bills on time and carefully manage your checking account.
Get a Reality Check
Before graduating high school and going out on your own, it’s important to sit down and get a solid idea of what it takes to make ends meet while living the lifestyle you desire.