5 Very Humble Financial Advice for Teenagers
- SHB
- Oct 15, 2019
- 5 min read
Updated: Oct 28, 2019
You may wonder why i start financial advice for teenagers? I believe the first steps towards financially independance starts at a young age and the early you start, the early you can start planning for semi-retirement, spending more time doing other things that you like. Although the things i am going to share is based on my humble life in Singapore, i am sure all the tips i am sharing can be applied to all over the world:)
1. Find a part time job during school holidays
The legal age you can start working is 13 years old in Singapore, i'm not sure for other countries so i'm not going to touch on that.
During your teenage years, managing your own finance may seem a daunting task but trust me, it will get easier once you go out there and start earning your own pocket money with your blood sweat tears.
Lets say you found a part time job in a lego store, it is paying you at $5/hr due to lack of experience, age and the education certificate you had at the moment, etc. You decided you want to work 8 hours per day and 4 days a week including both weekends as you still need to recharge your batteries and hang out with friends and family, in 1 month school holiday time, you will work a total of 16 days and total working hours is 128 hours.
128 hours x $5/hr = $640
The above shows how much you earn in a month without working 5 days per week, as a student and teenager, this is already good money. There are 2 long school holidays in a year, so the following calculations shows approximate how much you make in a year if you work through both holidays.
$640 × 2 = $1280
If you repeat the process throughout your secondary school life, which i assume 4 years in total.
$1280 x 4 =$5120
The numbers do not lie, the efforts you put in during your teenage life will help you when you reach mid-twenties where you can start to enjoy financial freedom, plan for early semi-retirement. Those savings can help you pay for your future school fees without bank loan or asking from parents, those money can be set aside for investment.
2. Avoid Fear of Missing Out (FOMO)
As the title says, fearing of missing out or lagging behind in terms of fashion trend, latest electronic gadgets, latest games, etc. I've been through as a teenager, its feels suck as i could not catch up with much of the trend as i do not have enough money and when i spend it to avoid missing out, i was already feeling miserable as the money could be used elsewhere.
Personally, i have 3 pointers for this section.
Its not wrong to buy the latest gadget or clothing when you really need it, just make sure you put in effort to maintain it so it can last long and do not need you to buy a new set in a quick span of time, hopefully it can last you years before changing it.
When you are in a circle of friends who are constantly chasing trends, you probably need to know when to limit your time with them. I am not trying to control your circle of friends, just go ahead and hang out with the people you like. It will be great if you can control your urge but knowing human nature, sooner or later, you will succumb.
Once you start to have a feeling of spending on something to catch up trend and part of you are saying "Please don't spend that money", you probably need to heed that inner voice and put that money aside in your piggy bank or savings account as soon as possible.
3. Opening a Joint savings account
The legal age to open an individual account in Singapore is 18 years old, so anything age before that will require joint account with one of your parents or guardian.
Why is it important to have bank savings account at teenage years? Why the hassle? If you follow the first 2 points above, you will start accumulate more money, you probably will need a savings account to store it instead lying around in your house which may tempt you to spend more. Even if you don't work during the holidays, the money you set aside from your parents' allowance will also add up.
While you are busy saving up for future, you will also learn how to budget so when by the time you reach young adulthood which is early 20s, you will enjoy the feeling of financial freedom or the feeling of accumulating wealth is not that difficult even though the journey is long and tough.
So once you reached 18 years old, you can choose to have that account to be individual or continue as a joint savings account. Here are 2 links i want to share for opening such accounts:
4. Invest time and effort in your passion
Why would investing time and effort in your passion related to this article "Financial Tips"? Be it arts, cooking, music, sports and so on....during your teenage years, you have all the time in your life to try your best to cultivate your passion. You have all the time to take risks and failures, all these experiences will make you more knowledgeable and wiser and then eventually lead to something better.
Regardless whether your family members, your friends, your teachers mentions about your passion will not bring food to the table in the future, take a step back and breathe and then walk away from the conversation with a smile :)
Remember time is on your side, grow your passion and network with more people who had similar passion or supports your passion. Eventually, it may become a side hustle on top of your studies or when you start working. If you are able to make it as your main gig, that's worth celebrating!!!
5. Invest time and money into your own health
As the old saying "Health is Wealth". How to build wealth without health🤷♂️
You might spend your midnights playing online games with/without your friends, you may spend money on fast foods/cup noodles for most of your meals, what do you gain in the end as you age? As teenagers undergoing puberty, your body will need alot of nutritions and sufficient rest and the financial tip for this point is:
to spend the money on healthier foods
spend the money to go skating, go bowling centres, etc
Spend time alone/with friends in sports that doesn't require money like jogging, soccer, basketball, etc
You must be curious why a financial tips advise you to spend money. It is to advise you to spend time and money on your precious health so you can continue your hustle for a long long time.
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