Common Money Mistakes

Teens, myself included, often make money mistakes because we lack experience managing finances. The number one issue run into by teens is spending an excess amount of money on “wants”. This can be constantly going out to buy food or indulging in expensive daily habits. For example, buying daily lattes adds up—$5 a day = $150 a month. With the instant gratification of making a purchase, and the justification that comes with it that you made the money, saving for the future is often overlooked for things teens consider to be important now.

              Another mistake made by teens is the concept of “saving later”. This essentially is just the thought that you will always have money in the next paycheck that you can save so you can spend the money you made on things you want. The idea of saving later builds bad habits especially when you start doing it early as a teen and it will carry over into your adult life when it is a necessity to have a solid amount of savings. With no long term savings that compound and make money off investments, the likelihood that you are financially comfortable is much lower than if you start saving a portion of your paycheck every time you get it with no exceptions. This epidemic can be seen in the fact that 69% of teens have less than $1,000 in their savings account (see figure 3)

Figure 1 (source: https://headphonesaddict.com/teen-spending/)

One of the biggest financial mistakes teens make is giving away money too freely. It’s easy to hand cash to friends or siblings without thinking, but if you don’t set clear terms for getting it back, you’re the one left short. Unless you truly mean it as a gift, make a plan for repayment so your money isn’t just disappearing into someone else’s pocket.

If you’re ever unsure about a financial choice, or worried you might be making the wrong move, don’t do it alone. Take a little time to research online and talk it over with adults who have more experience. A quick conversation now can save you from bigger problems later and help you make smarter decisions for your future."