So your teenagers and young adults know how to spend, but do they know how to budget for the things they really want? Learning good money management should be an essential life skill.
A Reason To Save
For many teenagers and young adults with part-time jobs, spending their entire pay each week is easy if they don’t have pressing financial obligations. This is why it’s important to discuss a long-term goal and find a reason to save.
Perhaps this goal will be a car, a holiday with friends, higher education – or even a rental bond if they want to move out. Just make sure you emphasise that they will still need money after the purchase, either for running costs or to enjoy their social lives, so they shouldn’t blow the lot.
The envelope method is a great way to learn about budgeting. Label real envelopes – or use tags in an app – with categories such as clothes, nights out, transport, phone, food, and university or school supplies. These should cover all their current expenses. Then allocate money to each envelope every pay day.
They can also use MoneySmart’s Budget Planner and apps such as TrackMySPEND to help them work out their goals and how much to allocate to each envelope.
If you have any questions on budgeting please contact NFPG today.
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