Teens: What You Need To Know About Flying The Nest

As you approach the end of high school, you’re probably looking toward college with a heady mix of fear, apprehension and outright excitement. This is your time as a young adult – too old for babyish curfews and rules, too young to be totally independent from the bank of mom and dad. It’s your time to strike out and live the way you’ve always wanted to live; away from home, from rules, from regulations and from being under the watchful parental eye. The question you have to ask yourself is whether you are ready. Are you ready to make that leap and be in charge of yourself?

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You’re probably answering yes, saying it loud and proud and demanding the number for the moving companies you will call to help you gather ye rosebuds and sow them elsewhere! But wait – there are some things you’re going to need to know before you take that step. College may be ‘moving away’ but you’ll be back for holidays, and if you want to be truly independent you have to look within yourself and decide whether you really are ready.

Self-Help Skills. Before you move away from home to go to college, there are going to be a few skills you need to have under your belt. Ideally, your mom and dad instilled in you from a young age some tricks and tips in looking after yourself, namely being able to do your own laundry, cook something more than Ramen on toast and how to pay your own bills. If the idea that you have to do any of this stuff is concerning to you, then you’re not ready to make that leap. You need to learn how to plan ahead with your money so you can balance a grocery bill, your utilities, rent and even have cash left for socialising. You don’t want to have to call up your parents every week because you blew your cash – so be smart.

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Values. As a teenager, you’re going to come under all kinds of pressure from people around you. Drugs, alcohol, cigarettes and any number of taboo items that you would have had many lessons on saying no to. Upholding your values as a person is a key part of your developing maturity. Aim to fit what you want from yourself, rather than fit in with the crowds and be a sheep. You don’t have to follow the crowd for a good time. Have some self-assurance and if you feel like your own morals are in question, it’s a pretty accurate reason to stay confident in your beliefs and just say no.

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Your parents are equally as nervous about you moving out of their home. They’ve cared for you and provided for you your whole life, all they want is what is best for you. Know that even if you’re living halfway across the country, they’ll always be there for you as a confidant, as someone to lean on and as a back-up just in case. Rely on them but trust yourself. Moving is a big step, but it doesn’t have to be a scary one.

 

Money Math: Valuable Lessons To Learn At College

When you leave school, there’s every chance that you can solve equations, plot graphs, and measure angles, but many college students have limited experience when it comes to managing money. In school, you’re often taught how to solve problems, but these aren’t issues that will necessarily crop up in real-life situations away from the classroom. If you’re preparing to go to college or you’re moving on to the next stage of your course, this guide should come in handy.

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Evaluating your accounts

Going away to college is an excellent time to look over your accounts and determine whether they still work for you now that you’re about to become a college student. If you’ve been with the same bank since you opened your first account, you may find that there are other options out there worth considering. Look at accounts that are geared towards students. Some features, such as online bill payments and low daily balance limits, may be particularly beneficial if you’re swapping high school for college. Before you start your course, take a few minutes to have a look online, explore your options and choose the best account for you. It’s not hard to open a new account, and in many cases, you can do this online.

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Learning to budget

When you go away to college, there’s every chance that this will be the first time you’ve had to budget properly. Whether you’ve taken out a student loan to help with your fees or the cost of living, or you have an allowance from your parents, it’s essential to learn to budget as quickly as possible. When you’ve got money in your account, it can be very tempting to spend it, and you don’t want any nasty surprises when you go to an ATM or check your balance online. It’s very easy to get carried away at the beginning of the semester, but remember that your money has got to last several weeks.

There are many different ways you can budget. Some people prefer to stick to tried and tested traditional methods, such as noting down outgoings in a notepad and updating your spending record with a simple pen. Others use apps or spreadsheets. Whatever technique you prefer, you need to write down exactly how much money you’ve got coming in and what’s going out. Remember that with loans, you’ll usually get a lump sum, rather than regular payments. When you’ve got everything written down, you can ascertain how much disposable income you have. This is the money you have available to spend on socializing or buying new clothes, for example.

From a budget you’ve done for the semester, you can then break this down into a monthly and weekly budget. This will give you a figure to stick to every week. If math isn’t your strong point, don’t worry. You don’t have to sit and work out complex calculations for hours on end. There are really useful features like a fraction calculator and budgeting tools online that make life much easier. If you find it hard to control your spending and keep track of how much money you’ve spent in a week, one option is to take your weekly allowance out of the atm and keep it in a safe place. It’s usually easier to monitor spending when you have cash.

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Understanding loans and credit and planning for the future

When you’re a student, you may not even think twice about taking out a loan or filling in a credit card application. The trouble is that the decisions you make at the beginning of your college journey could affect you long after you’ve graduated. In many cases, college isn’t a viable option without a loan, but be careful about borrowing too much money or getting into debt that you can’t afford to repay. With college loans, it’s common to start repaying your loan when you start working, and you have an income. However, the terms differ according to the type of loan, and if you’ve taken out a private student loan from a bank, rather than a federal fund, you may be required to start your repayments much sooner. If you take out additional loans to your student loan, this will increase your debt, so make sure you can afford the repayments. If you miss payments or you get into a lot of debt, this affects your credit rating.

The average US student accumulates around $30,000 worth of debt over the course of their college career. This is a significant figure, but if you’re sensible with money and you understand the impact of borrowing, you should be able to manage your finances in a way that makes college affordable. As soon as you start working, and you’re earning a certain amount on a regular basis, you can start paying back your loan.

The trouble with accumulating debt comes when you can’t afford the repayments. If you’ve taken out a loan or you have credit cards, and you can’t meet the minimum payment every month, you’re likely to encounter penalties and charges, and your credit score will be affected. If you have a low credit rating, this will make it more difficult for you to borrow money in the future. This may mean that you’ll struggle to take out a mortgage and it may also have negative implications for your employment prospects, as many companies carry out credit checks.

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Going mobile

In this day and age, many of us rely on our phones to carry out a range of simple, everyday actions, including checking our bank balance. If you’re a student, it’s really useful to have access to mobile banking. This enables you to check your balances whenever and wherever you want, make payments and get in touch with your bank. If you don’t already have online banking, download your bank’s app now.

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If you’re preparing to go to college, you’re probably looking forward to broadening your horizons, taking on new challenges and forming friendships, but don’t lose sight of the importance of managing your money. Work out a budget that will see you through the semester, keep an eye on your accounts, and think very carefully about borrowing money. Use apps to take control of your finances, seek advice if you need help with debt, and make sure you’ve got the best account before you leave home.

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Teaching Teens About Investment: The Basics

As a parent with teenagers, you are likely to be worried about their financial futures. If economists are to be believed, millennials could be about to become the first ever generation to be less well off than their parents – so there is obvious cause for concern.

It has never been more important, then, to teach your young adult children the vital importance of saving – and investing in their future. I’ve put together a few ideas which should help you explain – and demonstrate – some of the concepts of investment to your teens.

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Develop their interest in world affairs

Knowledge of global events and their impact on the markets is critical for investors, so encourage your teen to keep in touch with the news. OK, so if you are anything like the average family, your teens are likely to turn off when the news comes on. But, you mustn’t mistake this for disinterest in current and world affairs. There is a good chance that your teens have a keen interest in what’s going on in the world they just choose not to listen to a mainstream voice. Encourage it, of course, but start telling them the benefits of fact-checking and investigating sources. It will prove to be hugely beneficial when it comes to the day they start making investments.

Offer them allowance deals

If you are still giving your teen a weekly allowance, see if you can show them the benefits of putting money way and saving it. For example, let’s say you give them $10 each week. You could suggest that if they gave you back half and save it for 6 months, you would match what they have kept back, doubling their money. Not only will it show them the value of putting money away, but it will also teach them a little about interest and making their money work harder.

Get started on real estate

Buying and selling homes isn’t something your kids will be doing for a while yet. But that doesn’t mean it isn’t a subject you should be discussing. Educational games can help the younger ones, and Monopoly is always a great way to introduce the concept of investing money in property to get more back. If you have the money, you could, potentially, look around for cheap homes for sale, buy one, and let them run it as a business – assuming they are old enough, of course. There’s nothing to stop you from investing in property as a family business, either. You could, perhaps, give everyone tasks they are responsible for and pay them out of any profits earned. Finally, ask their advice. Too many households shield finances from their kids, but being open and honest will help them learn and, most importantly, ask questions.

Talk about the stock markets

Teens love modern technology and big brands – and there is a perfect chance there for you to take their interest further. You could even set them up with a little stock to play with, and see how the markets fluctuate for themselves. As long as your teens have a grasp of money and are interested in the subject matter, it should be easy enough to peak their interest in the relevant markets.

Do you have any suggestions on how to teach teens about investment? Let me know your thoughts in the comments!

 

>Scary statistics about students and money

>Adding fuel to the fire for the need for better financial education – here are some scary statistics from the US regarding students and finance.

More college students drop out of college because of financial reasons than because of academic reasons?

Some college age students have committed suicide because they can’t handle the debt that they got themselves into?

62% expect of college graduates will have a student loan debt averaging $27,236 (Student Monitor)

40% will never gain a net worth in excess of $10,000 (American Dream Education Campaign)

In most cases, economics and personal financial literacy programs are elective classes so “only 12% of Americans graduate from high school having learned anything about money at all.” (FoxNews.com)

Less than 1/4 of students and only 20% of parents say students are very well prepared to deal with the financial challenges that await them after graduation. (KeyBank)

57% of college graduates plan to move back with their parents. (MonsterTrak.com)

Research shows that individuals who have taken a personal finance education course have a higher savings rate, higher net worth and make larger contributions to their 401ks. (The Department of the Treasury)

Studies show that it takes less than 10 hours of financial literacy education to influence a child’s financial choices and decisions as adults.