When I was 18 managing my money was not the highest priority on the list. As I recall sport and socialising received the most dedicated attention!
However what I have learnt since I left school is the earlier you do get into some good financial habits the less financial trouble you will find yourself in when you are older.
I have recently found myself giving financial advice to the daughter of good friends of mine who is a travelling companion with me a couple of days per week. She is 17, three months into a hairdressing apprenticeship, living at home, desperate to purchase a car and is considering getting a loan to help with financing the purchase.
Unfortunately, I have played devil’s advocate and told her all of the horror stories about the costs of running a car including annual registration, comprehensive car insurance, petrol, repairs and regular servicing. I also have found myself talking her out of getting a personal loan due to the extra interest costs she would have to pay on top of her loan repayments. Whilst she is in a good savings habit, it would be preferable to delay the purchase of the car by say 6 months, save the extra amount which she would have borrowed and pay cash (with no borrowings) for the complete purchase.
One thing we need to teach all of our kids (and ourselves) is patience. Patience is a virtue which could save us all a huge amount of money.
It is critical that we teach our kids not to make these same mistakes â€” this will help in reducing financial stresses which are caused by credit card debt and personal loan debt! Remember, if you want your kids to listen to your advice, it will carry a lot more weight if you practice what you preach!
If you can only do a few things for your kids before they leave school or as they enter the workforce it should include:
Us adults might also be able to apply these tips to our own situation and become great examples for our kids. These are valuable lessons that will have a huge impact on the financial future of your children.