There’s no doubt that finances and saving are top-of-mind for many in our country. Between rising gas prices and hyper-inflation of groceries, families are struggling to make ends meet. But unfortunately, it’s becoming increasingly difficult to teach young people how to save when you, as parents, may be living paycheck to paycheck.
Finances are a stressful topic for most people. Unfortunately, there’s no easy way to approach this with your children, but even though times are tough, there are some things you can do to try and set a good example for your children and improve your financial situation.
Tracking Your Finances
Before you can save any money, it’s crucial to track how much you spend on essentials, wants, and retirement or emergency funds. However, it can be challenging to know how much money you can save without genuinely knowing everything. Some ways to track your finances include:
- Track Spending, Bills, and Deposits – Download spending apps such as Mint, TrueBill, and Quicken. These apps can show you exactly how much you spend on bills, personal items, entertainment, etc.
- Repay Debt – Make a list of your debts and pay the smallest debts down first. Then, after the smaller debts have been settled, you can take the amount you used to pay down that debt and roll it into the more significant obligations.
- Set up Automatic Payments – Often, bills can see reductions when the payee sets up their account to be on auto-draft. Automatic payments will help save some money while alleviating the headache of remembering to pay.
Budgeting Tips For Saving
Nobody likes an emergency, but they happen. Being prepared for the unexpected can not only save you money later but also the hassle of trying to figure out how to handle the emergency. Some ways to save:
- Nice to Have’s – Wait 30 days before purchasing unnecessary items.
- Investments – Adjust your investment portfolio to meet the demands of inflation. Sometimes saving money in a different area, such as a savings account, may become necessary during recessions.
- Automate Savings – Most banks can save a set amount of money each week, bi-weekly or monthly, so savings are simplified. You may even spend less if you see you have less money in your checking account.
- Review your subscriptions – Sometimes, you may find a reoccurring subscription you hardly ever use. Why not cut it out of your budget?
- Create a Shopping List – Learning how to maximize the food items included in multiple meals is not only a time saver but also a money saver. For example, knowing you will only use a cup of chicken broth, but the can holds two cups may help you with a second dinner recipe later in the week.
- Insure yourself – Some insurance companies offer bundles that include car insurance and renter’s insurance. In addition, preparing for unexpected emergencies such as a burglary or fire ensures that replacing your belongings doesn’t have to come out of your pocket.
Tips For Teen Finances
Your teen will thank you later for helping them learn intelligent financial moves and saving tips. They can get started today even if they are making income in little ways, such as babysitting or mowing lawns in the neighborhood. Outside of the most prominent pieces of advice, here are a few more tips that you can share with your teen.
- Saving For the Future – Start a 529 Plan for your teen or have them contribute towards it if they have a part-time job. A 529 Plan isn’t just for college; teens can use the plan for technical training and even student loan debt repayment.
- Paid Passion Projects – One of the best ways to teach your teen how to save money is by helping them turn a passion project into a paid one. With e-commerce, social media shopping, and remote work on the rise, finding ways to turn your passion into a side job is easy.
- Sell Unused Or Gently Used Items – Apps like Decluttr, eBay, Facebook Marketplace, and Poshmark offer a platform to sell unwanted items that can make the process painless.
- Try a Money Challenge – Help your teen find a bank that uses rollover change from checking to savings. Any amount spent that isn’t a whole dollar will have the difference rounded up to the nearest dollar. The money to round up the dollar will go directly into a savings account.
- Categorize Spending – Fifty percent of your teen’s income should go towards essentials such as bills, thirty percent of their income may be allotted for wants, and twenty percent can go towards savings. This 50/30/20 rule will help your teen develop healthy financial decisions early on.
Taking the time to educate your teen and incorporate some tips of your own are minor ways to help your finances and savings that make a big difference. Even though your child’s school may teach them about finances, some curricula may not cover everything, or may not offer up critical advice that can help your teen today. Despite the ebbs and flows of our economy, there are things you can do to help your own wallet and savings for the future.