5 Smart Financial Moves For Teens
I hated people telling me about all the things I would know when I grew up. I felt pretty grown up at sixteen, and certainly thought I knew a lot. Imagine my despair at becoming one of ‘those’ people now, who wishes I had done certain things as a teenager. One was not wearing suspenders hanging around my knees, the other would have been making a couple of the following moves.
Get Credit, Early
I didn’t have a credit card until my early twenties, and I had no idea how to cope with it once I did. Bringing together the cauldron that is the first couple of years out of home, a burgeoning university beer scene and a credit card can only spell disaster. The chances are, you will use a credit card at some point. Getting one while in your teens, with a minute limit and a stipulation to pay it off at the end of every month, might be a smarter way of learning how to use one than the incredibly steep learning curve I inflicted upon myself and my finances.
Get Super
Yes, yes, I know. I was that incredibly annoying young person who ‘didn’t trust’ super and relied upon ‘liquidity’ more than retirement savings. Whatever. The reality is, with life expectancy the way it is, our retirement could stretch for twenty years. Working out how to fund that is going to be a major challenge for governments and individuals alike. Make compound interest work in your favour. Get a super account, and ask your employer to make your contributions.
Save 10% Of Your Income
Now’s the time to start. In fact, now is going to be one of the easiest times to save 10% of your income as you have very little draining it, no kids, no mortgages, no HECs debt. Even if you spend it on something big, at least you’ve invested in something significant. As one of life’s great fritterers, I rarely regret my big purchases; well thought out, used often, worth the price I paid. What I really regret are all the $5 shirts from Kmart I couldn’t be bothered taking back, and all the ATM fees that drift out of my bank account.
Pay Your Debts
We basically live debt-free for the first twenty years of existence, then live with some form of debt for the next couple of decades. Start out on the right footing; pay back your olds when they lend you twenty bucks, don’t let someone else always foot the bill, only buy a car when you’re sure you can be the one to run it. Being treated as an adult has the unfortunate consequence of having to act like one.
Keep Your Records
Even if you chuck them in one folder, without any kind of system, make sure you keep all your records and receipts in one place for the day you are a bit older and in need of one of them. Birth certificates, tax records, your passport. It’s easy to lose them, but it’s an enormous pain to replace them. Start getting in the habit of keeping your receipts. If you can work yourself up to tracking your spending, you’re a star. If you can wrangle that into a budget, then you’re lightyears ahead.
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