Financial Literacy for Teens: 10 Must-Know Basics

Financial Literacy for Teens

Like many other critical life skills, financial literacy and responsibility have to be taught. If you are parenting a teen, then you should know that their teenage years are ideal for teaching them about finances.  Let’s talk about financial literacy for teens and the 10 must-know basics.

1. Teach Them the Concept of Compound Interest

You can help young kids understand compound interest with real examples and where they are involved directly or indirectly. For instance, if you have dividend stock in your portfolio, you can show them how reinvesting dividends in the investment pays off.

2. Have Tax Talks

If your young kid is freelancing or running a side gig, they will have to pay taxes. Even if they are not tax-liable for now, they will become liable soon. Therefore, it is vital that you now start discussing taxes with them. 

3. Help Them Start Budgeting

Get your teenager involved in the budgeting of the household. The use of budgeting apps can make this process more interesting and immersive for them. Let them make the budget of the house for one month or help them create their own basic budget.

4. Advise Them on Making Money

Young people get a lot of free time on their hands during various academic breaks, and the best utilization of this time is in learning about how to make money. Teens can make the most of their time by learning about different moneymaking avenues, like investing with stocks, bonds, and other investment avenues.

5. Let Them Fail

You have to teach your teens that it is okay to fail with any financial decision as long as they can make sense of the failure and review their future strategies to prevent it from happening again. In fact, failure will teach them an important lesson about finance. 

Swipe Up to Learn About Financial Literacy for Teens

For More Posts Like This Visit

Money Saved Is Money Earned!