Chances are, when your child reaches their teenage years, they'll get their first ‘real world’ job.
Whether that's waiting tables, answering phones, or working in a shop, it may well be the first time they experience the reward of buying things with their own hard-earned cash.
But it's difficult sometimes to guide teens towards sensible spending choices and achievable savings goals. So how do you help your teens create a realistic savings plan, and stick to it?
Here are 4 tips on how to set savings goals with teens:
1. Keep them motivated
While savings goals are so rewarding when you reach them, the process can feel challenging at times. A great strategy to keep teens motivated with a long-term savings goal is to build in some rewards along the way. For example, if they're saving $50 a week for a $600 holiday, tell them that when they reach a significant milestone, such as $300, they can spend the next week’s $50 on something else they really want. It might push the holiday savings goal out a little, but they'll be more likely to stay on-track.
2. Put spending into perspective
Showing teenagers what they can get for a similar amount of money can give perspective and help them make responsible saving and spending decisions. Say they are going through a movie phase. You could show them that 10 trips to the cinema and/or cafe could have bought them that video game or pair of shoes they were after. Similarly, if you chat to them about the time it would take to earn the money or save for their games or clothes, you're helping to influence their spending choices in a positive way.
3. Map out additional costs
Sometimes, the things teenagers want to buy aren't just one-off expenses. Cars, for example, are something many teenagers aspire to own, but they don't think about the ongoing associated costs, such as petrol, insurance and servicing. It would be worthwhile helping them map out any costs they won't have thought of, so there aren't any financial surprises down the track.
4. Encourage independence
The best way to help your teenager make responsible spending decisions is to encourage them to use their own money whenever possible. This will give them the confidence to manage their own money, with your guidance, and develop positive financial habits that will last well into their adulthood.