When you’re a kid, particularly a teenager, any money that you get feels like found money that you can blow through quickly. And while that’s largely okay, it is helpful for kids to know how to manage their finances.
More than anything, these habits are important for later in life when knowing your budget down to the penny is an essential way of life. Without learning those skills, you won’t be prepared for making a budget later on. Here are a few things that teens can learn about personal finance.
Know About How Bank Accounts Work
Banks might seem self-explanatory – it’s a place to house your money – but it really is far more complicated than that. Depending on the bank that you choose, there are fees to be aware of, specific transaction limits, bank transfers, and a litany of other things to be aware of.
When you don’t know about all of these various factors, you could find yourself swimming in fees before you realize it. You work too hard for your money; you don’t need to go giving it away to banks who already have a ton of it.
Know How Credit Cards Work
This is one of the biggest trouble areas for teenagers. The misconception is that credit cards are free money, but the fact is that nothing is free. That money will have to be paid eventually and you could find yourself in a pretty steep hole if you aren’t careful.
Know about the fees, transfer rates, balances, and all the other things that make a credit card work. When you know how to use them properly, they can be a great way to build credit and work to get you out of a jam every now and again.