Why Are Teens Horrible When It Comes to Dealing with Finances
A lot of people have made bad financial decisions, but teenagers are definitely guilty of making mistakes with money as they have no real understanding of the value of money or money management.
As parents, it is up to us to teach them the proper responsibilities that come with both spending and making money. Here is a list if the biggest mistakes that teenagers make with their money.
Underestimating the Product Prices
Many teenagers don’t realize that there are associated costs on buying big ticket items like a new computer or a car. Yes, they may have saved up to be able to purchase those expensive items, however most are not prepared for the additional costs of car insurance, tires, roadside assistance programs, gas, internet/data fees, and computer repairs.
Buying More Just Because
Teenagers often times buy more of one thing than they actually need. For example, when teenagers see clothes on sale, they may buy 10 items of clothing, instead 2 or 3 as they are not thinking about or concerned with the fact they can always come back later and something new (and maybe better) will be on sale. Teenagers for some reason, often let money burn a whole in their pockets. And instead of saving, all they seem to do is spend.
Spending More Than Is In Their Accounts
Spending more than what is available in a checking or savings account is a major problem that most teenagers have. Due to lack of financial education, they don’t maintain their balances and use their debit cards as credit cards until they get ready to make a purchase and the card reader says declined. A lot of teenagers don’t regularly check the balances in their bank accounts, which leads them to overdraft fees and negative balances.
Spending to Impress and Keep Up with Their Friends
Teenagers tend to overspend to impress each other and fit in to their peer groups. Sometimes they overspend to impress their boyfriends or girlfriends. Also if their friends have the latest gadgets, they want the latest gadgets regardless of their family’s financial situation. Teenagers seldom realize that their friends may feel pressured to spend the same amount of money on something new just to fit in.
Putting Quantity Over Quality
Teenagers usually don’t pay attention to how well things are made as opposed to how much they cost. They sometimes think that they are getting a deal when really they can end up paying way more over the long run. For example, teenage girls tend to buy their shoes from $10 shoe stores, but due to the lack of quality in the make-up of the shoe, they can end up buying 10 – 12 new pair a year, opposed to spending $50 on one good pair of shoes that can last for 6 – 8 months.
Not Saving or Budgeting
Teenagers are the worse when it comes to putting money aside for their future. To them it is much easier to live in the present instead of preparing for the future. As most school are not teaching these youth about the importance of saving money and budgeting, a lot of these teens are lacking the financial education that they need to successfully manage their money in adulthood.
April Lewis-Parks has more than 15 years of experience in the financial sector, she is a certified financial counselor, and a consumer affairs advocate. As the director of education and public relations for Consolidated Credit she is dedicated to generating awareness about personal finance issues and acts as their consumer affairs advocate. As host of MissMoneyBee.com, she promotes financial education and offers timely and informative personal finance articles to educate the public. April’s promotional efforts can be seen in past issues of the New York Times, Washington Post, Newsday, Consumer Reports, the Business Journals, Money Magazine, Glamour, Cosmopolitan, Family Circle, among others. Connect with April on Google+.