I took an elective in my high school called “Personal Finance.” While I still may not be particularly excited about mathematics and numbers, what I’ve always loved about them is their application. I would say that is what drew me back then to choosing such an elective. The bottom line definition of personal finance for me is how I manage my money in the past, present, and future.
I learned things in that elective that I realized later on not everyone learned. So with that knowledge in hand, as well as a few other things I picked up along the way, here are the four things that every teenage student should know about personal finance.
1. Keep a log of your cash flow
Even as I write this as a married adult with kids, I admit this still isn’t easy. Getting started early though will help you keep track of how you spend, what you like to spend on, and how you can save and help. You can create a simple Excel or Numbers spreadsheet, or if you still like going “manual,” make six headings, such as Money In, Money Spent, On What, Money Donated (If Any), To What/Whom (If Any), and Money Saved.
You can check how you did at the end of the month to see emerging patterns. Maybe you spend more when you’re stressed? Or maybe you could lower your budget for your favourite drink. You can even do this weekly to see if there are particular days of the week you’re likely to spend.
You can also make a list of what you want to spend on later or for a certain occasion and refer to your list to see how you can cut back.
2. Know how to balance a chequebook
I had seen my mom fill out her chequebook countless times before I learned how to fill one up myself, from balancing the record portion in the beginning to actually filling the check to be issued for payment.
The details are pretty self-explanatory. The important thing is not to be intimidated with keeping the record up-to-date and accurate. Even when I probably issued my first check many years later when I started working, I was confident of doing so.
3. Make money goals.
Aside from setting aside money for that expensive lippy you’ve been dying to get or the latest sneaks you just have to wear, think of how you’d actually like to be money-wise a year from now, five years from now, and 10.
In five years, you would probably be in university. Are you planning to study abroad or stay local? What kind of college life would you like to have? In thinking that far ahead, you are preparing yourself for supporting yourself financially even just in part. Look out for jobs for youth to get you started. You can even ask the adults you know (your parents, relatives and/or teachers) for any part-time help they need at work.
Related: Be Thrifty Now to Thrive in Your 30s
4. Get personal with your bank
I’m assuming that you or our parents have opened your personal bank account. If not, now may be the time to research about different banks and what they offer to teens like you. It’s good to compare the offers to choose which one suits your lifestyle most.
If you already have an existing one, find out other instruments that you could invest your money in. I got my first time deposit right after university, at my first job. I compared the banks around my work based on their time deposit interest rates, minimum placement requirement, and tenures. I started small but kept my eyes peeled for better offers.
Whenever I couldn’t meet the placement requirement, I turned to my dad to help me supplement the balance. We either opened a joint fixed deposit or placed it in his name. When my part grew enough that I could open my own after the account’s maturity, I placed my part in my own time deposit.
Since you’re still young, check also the bank’s minimum age requirements. Again, if you’re too young, you can ask the help of your parents to get you started in this type of investment.
It’s never too early (or late, for that matter) to start thinking about money or our attitudes/upbringing about money. Keep reading the BankBazaar blog for more. Stay tuned. In the meantime, drop us a comment below.