Money myths are everywhere, and many teens believe them. Take time to learn financial facts and teach your children good financial habits.
Building good habits when they are young will set them up for a successful life.
MYTH 1: There will be time to be financially responsible later.
TRUTH: Teens have some big financial advantages. They typically don’t have major financial responsibilities like car payments or mortgages. The time to start saving and being responsible is right now. The benefits can’t be over-exaggerated.
MYTH 2: A large salary is necessary to create wealth.
TRUTH: The amount of money you make isn’t nearly as important as the amount you keep. Save and invest each month and you can easily be worth more at retirement than someone with a huge salary.
MYTH 3: More money means more happiness.
TRUTH: Studies have shown that this is true until an annual salary of about $70,000. After that, more money doesn’t increase happiness at all. If you can reliably pay your bills and have a little extra to pursue a couple of hobbies or take a vacation each year, you’re earning enough money to be as happy as anyone else.
MYTH 4: You can rely on luck or someone else to rescue you from a financial crisis.
TRUTH: Eventually, everyone must fend for themselves. Relying on the kindness of friends – or expecting to win the lottery – isn’t an effective financial strategy. Insurance and emergency savings are reliable ways to deal with financial crises.
Spend time with your teens talking about finances, and make sure they can tell truth from myth. If you don’t have the best financial habits, there’s no time like the present to change. Overcoming a bad habit yourself sets a powerful example for your teens, and can help them avoid struggles you’ve been through.