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Explaining the benefits of savings goals to teens

benefits of savings for teens imageTeenagers are in a unique position, historically speaking. While it’s true that they have more information at their fingertips than any generation before them, the constant bombardment of media stimuli wherever they turn can make sifting through all the competing messages difficult.

It therefore falls to the wiser and more experienced of us to think creatively when it comes to motivating teenagers to learn about personal finance management through setting savings goals.

The golden rule when it comes to teaching teens about anything has to be: Keep it simple, cut through the noise, and make it fun.

With that in mind, here are some things for you to try when looking to impart good savings habits to the teenagers in your life.

Set up a budget

Easier if your young one doesn’t have their own source of income yet, I’ll admit. Help your teen to identify something they want – be it a new phone, new clothes, a piece of tech – make sure it’s an achievable goal. Then sit down with them and work out how much they’ve got to play with in a given week or month, and help them identify how long it will take them to save the required amount. Check in with them regularly and make sure they’re on track. The satisfaction they’ll feel having controlled their own finances and having achieved their savings goal will be addictive! Check out our guide to setting up a budget here.

Reward good habits, or open an account that does

Put the stick aside – you’ll only need the carrot, I promise. By introducing your teen to the concept of interest on their savings, they’ll hopefully see the value of good saving habits. If your teen manages to leave their nest egg untouched in a given month, and their savings balance grows, top up their account with an extra $5 or $10 as a reward. Or if your teen is ready for their first account, find them one which rewards them in this way automatically! The Greater’s Life Saver Account does just this – every month their balance grows, we top up their account with interest payments. Find out more about the Life Saver here, and compare our Savings Accounts in full here.

The value of thrift

Teens often search for ways to stand out from the crowd during their formative years. One way to improve their range of saving skills while helping them on their road to adulthood is to teach them to hunt for bargains. Take them to thrift-stores and op-shops, show them the value of finding one-off pieces of clothing, footwear, nostalgia and so much more. You’ll be showing them how to make their dollar go further, while keeping more of their savings untouched.

Harness technology

You probably would have noticed by now that teenagers take to technology like ducks to water. My advice? There’s no room for being intimidated. Get your head around how to use some online calculators, or find a mobile app or game that helps make the process of saving more fun. Once you know how it works, recommend it to your teenager nonchalantly – their surprise at you being so tech-savvy will soon give way to curiosity, and the battle’s half-won! You can check out our handy online Savings Goal Calculator here.

Encourage employment

You may be in two minds about letting the teen in your life get their first job. Like it or not, it’s in their best interest learning-wise to seek employment. Nothing will teach them about the reality of money faster than receiving a paycheck, paying taxes, and having to depend on a set income. Before they start earning, discuss the prospect of putting a set amount aside each week. To give them their best chance of getting their first job, check out our How-to guide, available here.

If you found this blog helpful, and would like to be kept up to date with regular financial hints and tips, why not connect with Greater Bank on Social Media?

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