Financial advice for teenagersby Theresa Hus Content Writer for RealEstateAgent.com
When it comes to money, learning from someone else’s mistakes is always better. But, what we don’t learn when we are young, we often learn the hard way, later. Teenagers are at a difficult crossroad in their lives where they have to make countless decisions about the future. Their changing moods, though, don’t make your life easy, as a parent. They are rebellious and think they know everything. They may ignore your financial advice, especially if you have a bad credit score, thinking that you’re not the right person to talk about money and personal finance.
Whenever you catch them in a good mood, try to teach them serious stuff about finances. Of course, you may not be a certified financial planner, but you can still teach your teenagers a few basic principles. Don’t expect the school to provide the best financial education, either. So far, our education system failed to prepare us for adulthood, and it shows little signs of improvement in this area. So, parents, here’s how to help your children start on the right foot:
Teach them how to save money
As kids, you couldn’t teach them too many lessons about money. However, by now they must know that money doesn’t grow on trees and they will have to work hard for it. Only when they work hard for every bill they realize its real value. Only then $100 is worth more than its face value, and your teenagers might think twice before spending it on cheap thrills. So, your children will soon realize that it is harder to save money than to spend it. By starting a small business together such as baking or preparing homemade fresh dog food will teach them what it means to work for every dime. And this lesson is paving the way for the second lesson.
Prepare your teens for their first home loan
Probably you didn’t have someone to tell you how the money comes and goes nor did anyone tell you how the banking system works. You had to figure everything out yourself, making poor decisions regarding your credit cards or neglecting the deadlines on your bills. Your credit score may not be the best, but you’ve definitely learned a lot. Now, you should be able to talk openly with your children about what it means to save money for a down payment and what types of loans are available for them after graduation day, in case they want to become homeowners right after finishing college.
They may argue that homeownership is not for them. They may want to rent rather than buy a property. Don’t be shocked! At RealEstateAgent.com we have researched the homebuying behavior of each generation, and according to our findings, they may have other priorities than us. Still, you can convince them to buy their first home instead of paying someone else’s mortgage. Years pass by so quickly that by the time they decide to buy, they might have already lost a home through renting.
They may also imply that they don’t want to pay interest on a loan. If you had terrible experiences with previous loans, your teen might develop some form of debt-aversion. The new generation of homebuyers should look at the final price of the house and treat a loan as if it were a rent-to-own contract. They have to understand that their equity will gradually increase and with the last payment on their mortgage, the home will be theirs with no liens.
Embarking on a long-term loan involves a lot of budgeting also. It can be challenging if your children choose a career path that doesn’t provide a regular income, such as freelancing or self-employment. They may envision themselves as path-breaking entrepreneurs. Don’t discourage them, but don’t let them think that being on the other side, as an employee, is degrading or shameful. There is nothing wrong in entering the labor market as young entrepreneurs and move to a corporate career later, or vice-versa.
Prepare them for the first real estate investment
Think beyond your children’s housing needs! Help them choose a career path that is going to be financially rewarding. Still, listen to what they like and enjoy doing. Let them attend classes on personal finances, investing, and everything in between. Discuss with them the opportunities present in the local real estate market. You may find that there is a lack of senior housing in your community as well as special needs housing. Commercial real estate may be scarce, or there might be a need for student accommodation. There are so many real estate niches that could provide a decent passive income and allow you and your child to dream of early retirement.
Also, if you find college education to be excruciatingly expensive and you can’t afford to send your children to college, be honest about it and let them know that a college degree is not required for many professions including to become a real estate agent. As they gain more experience, they may go on and pass the real estate broker examination, which grants them the possibility to open their own real estate brokerage. Feel free to check the best real estate schools in the US.
Created on Sep 18th 2019 08:20. Viewed 801 times.