Today’s teens have ample opportunity to learn first-hand about how to handle finances, whether it’s spending the afternoon at the mall, dreaming about a car or finding a way to pay for college. With an average annual income for teens around $4,923, they have money, but having it and spending it wisely are two different things. Here are some tips for controlling expenses:
- Cut clothing costs. Teens spend more than one fifth of their money on clothing. Kids want to show their style, but there are ways to do it more cheaply. Discount stores, thrift shops and virtual yard sales hosted on social media sites can be great places to find the latest (or retro) looks for less.
- Save face. According to a Piper Jaffray survey, upper-income teen girls spend 11 percent of their money on beauty products, often at specialty stores. However, drugstore cosmetics may be just as effective as and quite a bit cheaper than the high-end products. Encourage teens to read online reviews and try out some alternatives.
- Chow down at home. Whether stopping at the local coffee shop for a tall mocha latte or grabbing a burger at the nearest fast-food place, teens spend about 23 percent of their money on eating out. Eating at home and bringing lunch to school may be cheaper and healthier.
- Put the brakes on school dance costs. Prom, homecoming and school dances as a whole have morphed from punch and cookies in a decorated gym to extravaganzas that cost an average of $919 per family, according to a Visa® survey. Save money by skipping the limo and pricey dress. Girls can take a page from guys, who typically rent their tuxes, and check out online dress rentals. These retailers rent designer prom gowns for a fraction of the cost of buying one. Who’s going to wear their prom gown ever again anyway?
Making smart financial choices
Learning how to budget and setting financial priorities can help teens now and in the future. Navy Federal’s MakingCents offers great guidance on managing money. It can even help prepare your teen to buy a car and pay for college!