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4 Minute ReadTopic: savings
Kids aren’t naturally patient.
Okay, so that’s not really a shock to any parent. From the day you brought your kids home, they wanted to be the center of your universe—partly because they depended on you and partly because they wanted their needs met as quickly as possible.
Even if patience is a virtue, it’s still a challenge to make it a part of our normal lives—and the lives of our kids. But one great way to nurture patience is by saving money, which is where you can connect with your kids in a meaningful way.
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After all, teens want stuff. Sometimes, they want big-budget stuff. So, challenging them to save up for those things actually teaches them some incredible life lessons, like goal-setting, delayed gratification, sacrifice, self-discipline and, yes, patience.
With that in mind, here are five things your teen may be thinking about—and could be saving for—right now.
Teen emergencies probably look different than adult emergencies. They may be dealing with a phone that fell in the toilet rather than a major medical event. But the scale isn’t as important as the habit. Building an emergency fund of at least $500 is something every teen needs so they’ll be prepared for the unexpected.
Whether it’s a new phone, a new computer or a new gaming system, the price tag for technology can be high. But the sense of accomplishment and pride from saving up cash and buying it with their own money can make a powerful impression on teens.
“Paying cash for a car and buying a used one is the shortest path to building wealth.”
When it comes to saving for a car, nothing beats clear communication. You may want to match what your teen saves, or you may want your teen to pay it all. Just make sure the expectations are spelled out ahead of time. Also, talk about the other costs that they might miss, like taxes, insurance, gas and regular maintenance.
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Some teens may be eyeing an international mission trip, while others might be planning a special trip with friends. But whether it’s to serve or just for fun, teens need to pay for it with cash. Help them identify their ultimate goal, break it down into bite-size pieces, and come up with ideas for making the numbers work.
"Student Loans are a road block to this generation.” @Rachel Cruze
It’s never too early to think about life after graduation. In a world weighed down by student loans, your teens need to know that going to school debt-free isn’t a pipe dream. Challenge them to start looking for scholarships early. Sign them up for ACT or SAT tutoring. Consider in-state universities and community colleges. And don’t forget about the power of a part-time job! Like buying a car, set clear expectations about what you can contribute, and plan for the rest. Sit down and estimate all of the costs that go along with college so you both have a realistic idea of what to aim for.
Parenting comes with its own unique challenges, including how to teach your kids to handle money. But you—and your teen—can do it together! And when you do, you’ll be on your way to raising more than just a great kid. You’ll be raising a competent adult.
To help you with the financial challenges of parenting, Dave Ramsey and his daughter Rachel Cruze created Smart Money Smart Kids, a six-week home study program based on the New York Times best-seller of the same title. In addition to saving, you can learn more about teaching your kids to work hard, spend wisely, and give generously—all with a spirit of contentment that will transform their lives.