Category:
How to Set Effective Savings Goals with Your Teenager
29 Jun 2015
Posted in: Getting Married
In this blog we’re bringing you a few tips to help you make sure your teenager both saves and spends wisely.
Most likely, when your children become teenagers they will get their very first part-time job. Whether this is babysitting, working behind a till in retail, waitressing or answering phones in a customer care centre, it could very well be their first experience of using their hard-earned cash to buy things they want.
We all know it can be difficult to guide teens towards spending wisely and meeting their savings goals. To both you and your teenager, here are some guidelines to help them make and stick to a savings strategy that’s realistic.
Motivation
It’s so rewarding when you reach long-term savings
goals, but we all know that the savings process itself can be tough at
times, particularly when the end goal is so far off. An ideal way to
keep your teens motivated is to build in smaller prizes along the way.
For example, if your teen is saving for a holiday that costs €400, let
them know that when they reach the halfway mark they can buy something
they really want for that holiday. Set an appropriate spending limit
for this, such as €40, and while it may push back the date they reach
their overall savings goal by, they will be more likely to keep on track.
Perspective
Before your teenager chooses to buy something, you can
assist them in making a more responsible decision by showing them the
other options available to them for the same cost. For example, if
they buying clothes valued at €100 could equate to ten trips to the
cinema with their friends. Show them the opportunity cost of their
decisions i.e. what they will have to do without by purchasing one
item over another, and you will positively influence their purchase decisions.
Additional costs
Often, some aspirational items for teenagers to own,
like cars, are not just an expense that’s one-off. There may be high
costs associated with these on an ongoing basis, including petrol,
servicing and insurance in the case of cars. Avoid nasty financial
surprises for your teenager and help them map out any cost which they
may not have considered before they make a major purchase.
Independence
By encouraging your teen to use their own money wherever
possible, you can help them develop a habit of making responsible
decisions when it comes to their finances. This will increase their
confidence to spend their money wisely and give you the peace of mind
to know they can look after themselves when it comes saving and spending.
To learn more about where your teenagers can save this hard earned cash with AIB, check out our website today and discover both our Junior Saver Account and Student Saver Account.
Allied Irish Banks, p.l.c. is regulated by the Central Bank of Ireland.