Are you a teen who is struggling with your weekly allowance, let alone save up?
Do you have the tendency to habitually want to spend money every time when you go out?
Do you get allowances from your parents yet, often cannot spend within budget or even end up overspending, or having to borrow from your friends?
How spending and saving habits can affect your adulthood
The habits you pick up when you are young can grow into your adulthood. What you practise now will eventually turn into your behaviour, your attitude and your character in future.
If you acquire bad spending habits, these habits will multiply and magnify into your lifestyle in future. Over time, you might constantly find yourself struggling with your finances. You might end up wishing that you had received some form of financial education when you’re younger.
The same applies towards building good habits and attitude towards money. With a good foundation and knowledge on finance education, you will be able to extend the habit of good money management into a lifestyle that you can afford and be comfortable with in time to come.
Saving Up For Rainy Days
Have you heard of the term ‘saving up for rainy days’ before? During our teenage years, building good money habits and saving up may not seem applicable to us yet, but you might be surprised to know that when you practise this seemingly useless habit, it will help you in your adulthood greatly.
Saving up need not be hard. Here is how you can get started.
Remove Bad Money Habits
Before we can start practising good habits, we will need to eradicate the bad habits, work on our mindset towards money before we start planting the good ones.
First Step: Observe Your Spending Habits; observe how you are spending your money.
Do you often overspend? Do you always have the urge to want to buy? Do you have the tendency to want to buy something every time you enter a shop?
When you go grocery shopping, do you mindlessly throw in candies and drinks into the cart?
When you are out with your friends, do you feel the need to treat them or buy something when they are buying even if you don’t really need it?
Is this a habit you picked up from someone you know?
What we practice or the habits we build on are often directly or indirectly influenced by the people around us, be it our family members or our social circle.
Mindless shopping is a bad spending habit which could affect us as we grow up because the amount that we will spend will only increase over time.
As we become more accustomed to spending unnecessarily, it becomes ingrained in us that we eventually spend without even realising what we have spent on.
Second Step: Understand your finances; how much you are getting each day and how are you spending your money.
Observe what you are spending on every day, especially when you are around others.
Do you feel that the need to spend or buy is stronger? Do you know what you are spending on?
If you observe the adults and how they are spending their money, you might find that many have no problem with spending, but they end up struggling to make ends meet by the middle of the month. It does not apply to everyone but what we practice when we are young, often affect who we turn out to be in our adult life.
When you are out with your family, watch how the adults are spending their money. Are they spending wisely? Are they used to bargaining for discounts? Do they compare prices or work out the savings from their purchases? Or do they buy when it looks nice, or feel good to have, grabbing items from the rack without thinking much? Is there a trend you can observe in terms of your spending habits to the people around you?
Third Step: Find out what money mean to you? What is the meaning of spending to you? Why do you spend?
[This is not the main cause, but major contributing factor in most situations] Most families are dual income these days. This means that both parents are usually working during the week and have little time to spend with their children. Some parents may compensate what they cannot give (time, concern and attention) to their children by gifting them what they want, material stuff, more allowances, and so on. This builds the meaning and value of money parents teach to their children.
To some, spending money may mean freedom to do what they want, or even as a means of communication or attention seeking.
On the other hand, having money may seem like security to others. When one has money, it makes them feel more secure, confident or even more powerful against others.
Fourth Step: Change Your Perspective Towards Money.
Money is a powerful piece of tool, but unless you assign meaning to the value of money, it is simply a piece of printed paper or moulded coin.
Money is not everything, but without money, you cannot do a lot of things. However, it does not mean you let money control your livelihood or the quality of friendships you will enjoy. Being around with friends, spending quality and meaningful moments together does not have to involve a lot of your allowances. Sometimes the best memories are created when you do free and simple activities together.
If you carry the mentality that spending money gives you power and face to your peers, counter that thought if it is really true. Do your friends treat you with loyalty? When you face problems, will your friends help you out with sincerity?
What is your perception towards spending? Do you tend to bargain because it feels cheap? Do you reject buying from second-hand shops because it feels like a place not for the rich? Do you go for brands because they make you feel classy? Change your perspectives because none of these is true!
How to make saving up easier?
Saving up can be fun and interesting, as well as engaging with your family and friends too. Here are some ways we can make saving up, if not kerb overspending fun and easier.
Spend within your limits
When we were studying, we didn’t receive a lot of money for our daily allowances. In fact, at $2 a day, it is below the average allowance a child would receive today. However, it was not an issue for us because we would always be spending within our limits. We even have change left at the end of the day to bank into our piggy bank.
Save Every Coin You Have Left
You don’t have to spend every last coin in your pocket. At the end of every day, drop your changes to your piggy bank and leave it untouched for the next 12 months. See how much your change accumulates by the end of it.
Make it your goal to have changes in your pocket every day.
Realise that Enjoyment Need Not Be Expensive
If you are one who spends a lot on friends or on activities that seem to be engaging but not really (such as watching movies or buying new gadgets that your friends also have), can you now tell me how do you feel after each event? Do you feel like a better individual or friend? Do you feel your friendships strengthened?
Enjoyment happens when you are engaged with each other. Playing sports together, helping each other out, studying or working on projects together or even exploring places on foot or bike can build on your friendship without spending much.
Explore Fun and Meaningful Free Activities
Get imaginative! Find out the various avenues and activities you can explore on to save cost. For instance, make use of student rates and concessions. Certain places sell cheaper tickets or entrances to students or persons below age 18 during non-peak periods.
Explore activities that do not require you to spend money. Get creative and encourage your friends to suggest novel ideas of doing things together as well.
Manage Your Own Funds – Demonstrates That You Are A Responsible Individual
How many of us have friends who come from a wealthy or well-to-do background, and how many of our friends are from humble families?
When we mingle with the richer friends, we might find that we tend to splurge more and think less of saving costs. The richer friends have thicker allowances and buffer to spend on what they want. Often times, we also end up spending more without us even realising.
When we learn to budget our expenses accordingly, we also learn to prioritise what we need with what we have. For instance, instead of buying soft drinks and snacks, and skipping meals because you didn’t have enough money left, why not bring your own water. Each time you skip buying those soft drinks and snacks, it could easily save you $2-3.
The point is not to spend blindly or have others perceive you as a rich person but to demonstrate that you are a responsible and sensible individual who knows how to make use of his/her money well and getting the best out of each experience.
Think and Experiment – Out Of The Box.
It is not easy to stop buying or change your habits when you are used to spending. That means you will miss the yummy good food or the moments out with your friends doing fun stuff. However, if you don’t change, it will be even more difficult to change a few years down the lane when you are so accustomed to spending first and struggling later because you have nothing saved up in the first place.
Do you know that you can save up and at the same time, spend on what you like or enjoy doing?
How about Paying Yourself (Saving Up) First? When you first get your allowance, allocate a certain amount ~15% of it into your savings (piggy bank) first. Dropping a 50 cent coin into your piggy back every day could easily earn you $2.50 in a 5-day school week. In a year, you could have easily saved up $125 from this little oblivious habit.
How about Delaying Short Term Feel-Good Activities? Many of us want what we want right there and then. When we are hot and thirsty, we waste no time buying cold soft drinks. When something new comes up, we inevitably have to be the first one to own or try them out, but so what if we are a few weeks or months late? So what if we don’t spend on that new game which could cost much cheaper in a few months’ time?
What if we waited for a few more days before deciding whether we want that new pair of shoes or not? Not only are you delaying buying something that you may not necessarily want, after all. You are also conditioning yourself to not be easily tempted. Delaying getting what you want does not make you a laggard or dull, it simply means you are making reasonable and responsible decisions. It shows others that you know what you want instead of following the crowd blindly.
Practice Sharing. How can you share food or drinks? Could you buy a bigger portion and split the cost? Could you buy a big bottle and share instead of ordering ala carte? Could you rotate or take turns playing what you have with your friends?
Invest in quality, not quantity or aesthetic. Brands do not always equal quality. A cheaper unknown brand could also be more durable than one that is expensive, looks nice and branded. However, there are also those with quality with some prices tag.
Rather than buying something that is cheap and cannot last, it is more practical to invest in something of quality because a substandard item that requires repair or replacement constantly will cost you more in the long term.
Experiment for yourself, find out how it feels and tweak your ways to save up more each time. If you can, share with and teach your friends a trick or two on how to save more! Better still, engage your close friends to start saving up together with you and learn new ways to save up together.
Learn skills while earning. Find out ways to increase your allowances with part time work that will not affect your studies, for example, waiting on tables, developing programs, flash event sales.
There are numerous sites such as Fiverr that pay for your skills and knowledge that you can do at home. If you are into developing games and apps, or video editing, you can take on assignments easily. If you are good at photoshop, editing, writing or even typing, you can earn some income from taking on assignments, provided you can manage your time and studies well. Check out how they charge for professional video editing in 24h
In an ideal world, it would be fun, interesting and liberating when we don’t have to worry about what we spend or where the money comes from. However, your parents or guardians are striving to bring the bread home. Some parents may be struggling to put the money on the table so don’t take what you have for granted.
Take the time to reflect on your spending habits, how and where you got them from, what money, saving up and spending mean to you. Then, identify the real meaning of money to yourself.
Learning to spend within our limit is a skill we all have to pick up sooner or later, if not now, than when you started earning an income for yourself. When you start now, you are starting on the right foundation now and it makes the process easier. By the time when you step into adulthood, not only will you have a savings of your own but you will also be leading a positive habit and lifestyle that others struggle to correct.
Do you have any methods that you practise and can share openly? Please tell us so we can all spend wise and save smart together.