Teenagers are notorious for not being able to handle money.
Teenagers live in a fantasy world where, for the most part, everything is handed to them. The majority of teens don't have to pay for their shelter, food or other basic needs. So the money that teenagers do have can be spent on just about anything, whether it is practical and needed or not.
For adults, this is concerning because as teenagers we are the future of our country. Once we exit this fantasy world we will enter the harsh conditions of reality where money is a necessity just to be alive, let alone to enjoy yourself.
It is important to start being conscious of our spending habits and money now so that when we are older we will have already developed good habits.
Learn to differentiate between wants and needs. This can be difficult and it's something that everyone struggles with. We've all seen something and just "had to have it." A good rule of thumb to follow is that needs are typically something general, such as food, whereas wants are usually something specific such as a particular brand of clothing. You need a jacket but you want a specific brand of a jacket. So before buying something ask yourself, "Is this a want or is this a need?"
Avoid emotional and impulse spending and buying. Emotional spending is buying something simply because of emotion -- you are excited, depressed, etc. Impulse buying is buying something you weren't planning on purchasing simply because it's on sale and you feel that you need it. Both of these categories go back to differentiating between whether or not an item is a want or a need.
Just because you don't need something doesn't necessarily mean that you can't have it. Being financially smart does not mean you deprive yourself from all wants. It just means that if it is a bigger purchase, you need to save up for it and incorporate it into your budget. You should also do research when purchasing more expensive items in order to find the best deal or the best quality item.
Before you buy, think in terms of time, not just in terms of money. So for example if you want a new CD that costs $15 and you make $7.50 an hour, this CD is costing you two hours of your time. You need to ask yourself if you feel that CD is worth two hours of your time. You also need to remember that by paying for a more expensive item, not only are you costing yourself more of your money, but more of your time.
Start saving now. These three words are said a lot. The reason for this repetition is because saving is so important. The younger you are when you start saving, the more you will have saved and the faster your money will multiply.
As a teenager, start saving now for reality. Savings help you to pay for college, help you to afford to move out on your own and also help with any other unexpected expenses that may occur. Whether it be a piggy bank or a savings account, whether it be $5 or $500, it does not matter. Saving something somehow is better than saving nothing.
So what is this so-called reality? Reality is that you need to plan for spending money on things beyond those things that you want. When you're out on your own, everything costs money. The house that you sleep in, the power that lights and warms your home, the food that you eat, the cable, the phone, the car and many other things will not pay for themselves. If you spend too much money on things that you want and do not plan to pay for your needs, those things will not continue to be there. Reality is that money is as important as the air we breathe; you cannot live without it and need to plan accordingly.
Create a budget. All of the above tips will help you to create a budget. First, before you can even think about what you are going to spend, you need to figure out your income. How much money are you making each month?
From there you need to plan out your expenses. Decide how much money is needed to pay for your needs such as gas or car insurance. Then put money into savings (how much money is left over will affect how much you save). After savings, budget out your money for wants such as entertainment. Use the above tips to stick to your budget.
For now, there probably won't be many long-term consequences if you buy wants versus needs because, for the most part, this fantasy world that teenagers live in covers most needs. Yet by differentiating between wants and needs, not impulse buying, doing your research, thinking in terms of time not just money, and creating a budget and sticking to it, we can all better prepare for and thrive in reality.
Caitlynn Kindall is a junior at Ogden High School. She enjoys softball and running, and can often be found clipping coupons. Email her at email@example.com.