Adapted from MU Office for Financial Success Finance Tip of the Week blog post by Lucy Schrader, former HES Associate State Specialist and Building Strong Families Program Coordinator, University of Missouri Extension
In this fast-paced world of automatic withdrawals, credit cards, debit cards, quick buys and online purchasing, people do not always realize where their money is going. Spending money is easier than ever. Youth have grown up with this technology and may be even more accustomed to convenient, automatic and sometimes mindless purchasing.
Keeping track of how we spend is an important lesson for anyone, of any age, so as you work out a system for tracking your spending, get the whole family involved and make it a teachable moment. The earlier youth learn important financial lessons like this, the better off they will be in the future.
The basics of tracking your spending (refer to Ways to track spending for more information and resources)
Once you have tracked your expenses, you can work on a budget. You can also set financial goals. For youth, goals may include saving for a car, a gaming system, a school trip, or saving for college. With goals in mind, you will be empowered to make better decisions, to avoid impulse buys and to save so that you can have and do the things that are important to you.
How to involve youth and teens
Youth and teens have a wide range of income levels. Some get small allowances, some get large amounts, others work and some have no money for themselves. It’s very important for them to understand finances and how to stay within their means. Setting a good example and involving them early is a great place to start.
Even young children can benefit from this lesson. For example, you may decide to give your child $1-2 per month to track. Create a simple system by just putting columns on paper. Work with your child to record how much he has and how much he spends. Talk with your child about the choices he has in regards to managing his money — does he want to make small purchases as soon as he gets the money, or does he want to save up for a bigger purchase? Help your child work out the pros and cons of each, but let him make the decision.
You can use books to help get conversations going about money and how to track spending. Here are just a couple of examples:
For financial programs and information in your area, contact your local MU Extension Center.