How Can You Help Your Teen Save Money From Their Summer Job?

Will your teenager be making money over the summer break? If they have few financial responsibilities, you may be worried they’ll spend it all on frivolities rather than sensibly saving. So, how can you encourage them to make smart decisions with their money?

Jason Higgs, the Senior Deals Strategist at Bountii, explains how you can teach your teen to build their savings. 

Discuss Why It’s Important

Before anything else, your child needs to understand how saving money can provide them with greater financial independence and opportunities in the future. You should explain how their savings could help them achieve their long-term goals (e.g., purchasing a car, travelling, or attending university). Jason adds, ‘Also, describe how maintaining an emergency fund offers financial stability when faced with unforeseen situations.’ 

Set Clear Savings Goals

Sit down with your teenager and help them create specific financial objectives. This way, they can track their progress and stay motivated to save money. Jason says, ‘As a parent, you should reward their savings efforts and celebrate milestones with them. This could involve matching a percentage of the amount they save or giving them a special treat.’

Assist With Budgeting

Show your teenager how to track their income from summer work, identify expenses, and see where their money goes. Teach them to prioritise funds for essentials and to make room for savings. 

Explore Savings Options

Encourage your child to open a new bank account - preferably one with no or minimal fees. Also, discuss enabling automatic transfers, as these can regularly move money to their savings account without them having to do it manually. Encourage your teen to research and compare different saving options so they can learn to make informed decisions.

Help Them Prioritise Needs Over Wants

Instil in your child the importance of long-term goals over fleeting desires. This will help foster a sense of financial responsibility and planning. In turn, they’ll be more disciplined regarding how much they spend on social events and unnecessary purchases. 

Jason says, ‘As a parent, you must lead by example. Don’t buy what you don’t need or can’t afford. Also, explain how you’re planning for the future regarding investments and pensions. Doing this will help your child adopt the life skill of money management early on, building a solid foundation for their future financial success and security.’