How Can I Assist My Teen With Future Planning?

Teenagers today are frequently subjected to pressure to establish a place for themselves in the world, which naturally causes them to occasionally worry about their financial security. We examine here the ways you can assist them in realizing their future planning-related goals and dreams.

49% of young people between the ages of 16 and 25 don’t believe they will ever be financially secure. This age group is under a lot of stress and worried about how the pandemic will affect their futures; 59% of them don’t think they will ever be able to afford a house.
Only 24% of young people are confident in managing their own finances, and 44% of them believe the pandemic has made it harder for them to find work. So, what can parents do to alleviate their teens’ worries and set them up for the future?

A logical response:

The future may appear exciting to an early teen (aged 13 to 15), a time of fun, independence, and freedom. When independence is imminent (between the ages of 16 and 18), such as starting a job, moving away from home, or making ends meet, the future becomes suddenly something to be worried about.

Dr. Carl E. Pickhardt, a psychologist, says that this fear of the future is a normal response to the unknown. It is a natural part of the mind’s emotional awareness system that alerts us to potential dangers when our experience world changes.

This isn’t necessarily a bad thing; the extent to which your teen is ready for the change and its associated responsibilities is the key.

Enhancing one’s self-worth

Fostering your child’s self-esteem and demonstrating that you believe they are capable of making the right decisions in life and acting confidently and responsibly is one of the keys to preparing your child for the future in any area of their life.

Teens who have a stronger belief in themselves are less likely to succumb to peer pressure, whether through dropping classes or accruing debt.

Your child might not be the best in Math or Science, but if they have a passion or interest, they will probably do well in other subjects.

Your teen’s future success depends on qualities like emotional intelligence, patience, determination, and sociability.

The hard way of learning

Even though secondary schools have included financial education in their curricula since 2014, schools frequently lack time and resources, and parental actions can have a greater impact.

According to Money Helper, which was formerly the Money Advice Service, only 40% of children claim that they were taught about money in school.

Providing your child with the opportunity to make their own mistakes is the best way for them to learn, so intervening whenever they run out of money or make a bad decision will prevent them from developing financial independence. From the moment they receive their first pocket money, they can learn important budgeting skills.

Teens, on the other hand, require both knowledge and experience in order to make the right choices as they enter the workforce or college

Investing in one’s future

You can help your teen plan for the future in a variety of ways, from the short-term (like arranging and saving for a vacation with friends) to the long-term (like buying their first car, saving for a deposit on a house, or traveling the world). The same set of inquiries needs to be asked of them all:

• How long will it be before the upcoming event occurs? Does it occur in the short term (within six months), medium term (within one year), or long term (within five years)?
• How much total cash do I require?
• How much cash do I currently have?
• What is my monthly savings potential?

The mere act of writing down these essential facts will initiate a discussion about setting priorities and budgeting:

• Is it possible to postpone the event until I have sufficient funds?
• Can I accomplish the objective at a lower cost, such as by traveling for a shorter amount of time, purchasing a car of a lower quality, or sharing a flat with more people?
• What can I cut back on or eliminate now to save money?
• Is it possible for me to borrow money, and if so, how will I repay it?

As these are questions that adults face on a weekly or monthly basis, you can help financial decision-making and planning for the future become natural processes by teaching your child to think in this way as early as possible. 

Budget journals

51% of young people feel like they missed out on spending time with family and friends due to the pandemic, and 26% of 18- to 24-year-olds confessed to feeling pressurized into attending events due to FOMO (fear of missing out). In addition, 9% of 25- to 34-year-olds said they had previously attended social events they couldn’t afford just so they could post it on social media.

However, social media isn’t all bad, and it has helped young people keep in touch with their friends. The rise of “money diaries” has caught the youth zeitgeist and is encouraging people to openly discuss money and financial concerns to avoid stress and isolation. By discussing budgeting and making financial decisions with your teen from a young age in their home environment, you as a parent can capitalize on this shift in attitude.

Preparing for the unanticipated

Preparing your child for unforeseen costs is another way to support them as they move toward independence. They might not be thinking about insurance, or they might not be aware that certain kinds of insurance, like car insurance, are required by law. Until something happens, it may seem like a lot of money to pay for little return.
A stolen bicycle or set of work tools will affect their income, a dropped laptop will disrupt their studies, and few teens will be without a mobile phone for a long, so it is essential to discuss insurance before making any significant life changes. Encourage them to investigate, despite the fact that it may initially be less expensive for them to be covered by your insurance.