Believe it or not, summer is just around the corner and for many teenagers, summer means a summer job. When I was 16 years old, I got my first summer job working in the meat market of a local grocery store. The minimum wage was $3.10 and I was making $3.25 but two weeks into my high paying position, I found out the guys sacking groceries up front were making minimum wage plus another $10 to $15 in tips. I quickly transferred, but found that I spent much of my tip money on video games after my shift was over.
There were a lot of lessons I needed to learn about money but I didn’t learn many of those lessons until decades later. I’m working to change that with my children.
Here are 7 important money lessons I’m teaching my teenagers
1. Money helps you achieve your goals
Money helps you get the things you need or want. Money can also help you buy those big ticket items you want like a car, a computer, a college education, and eventually a home.
2. Earn it but don’t burn it
Use money like a tool. You don’t abuse your tools, you care for them and use them to accomplish your personal goals. Money works the exact same way. You have to learn to budget your money, store it in a savings account, and share with others less fortunate.
3. Money is scarce
That scarcity is what makes people do crazy things to get it. Since it doesn’t grow on trees, it must be wisely spent because once it’s gone, your options are also gone. Learn to live on less than you make and your options increase exponentially.
4. Opportunity costs can be high
There are endless ways to spend your money. Spending it all on fun and games means you don’t have it to spend on food and clothing. Once your cash is spent, your opportunity to spend it on something you may need is gone.
5. Handle those “live” paychecks with care
If you don’t direct deposit your wages, but cash your paycheck instead, you will spend it all. Trust me. You will. Get that checking account set up and directly deposit your earnings there.
6. There is no free lunch
Nothing in life is free. Teens have generally spent their entire lives having things handed to them: food, clothes, necessities, and wants. It can be a shock to realize that it takes $75 to fill up your tank with gasoline and you only get to go 400 miles.
7. Time is money
Learn the skills of time management. You only have so many hours per day to get things done and you have to prioritize your time like you prioritize (budget) your dollars. Get to work on time since you aren’t paid until you clock in. Make your time at work effective and do your job to the best of your ability since your employer is paying for your time there.
These aren’t the only lessons teens need to learn but these are a good start. If we can manage to instill lessons such as these in our children and teenagers, they may stand a much better chance of succeeding financially, or at least much earlier, than we did.