When it comes to investing most people say the same thing: they wish they had started earlier. Having so many years ahead of you for your wealth to compound is a huge advantage that unfortunately most teenagers don’t take advantage of.

Teenagers are going through a transition from childhood to adulthood. All of a sudden they can do things that were only reserved for adults. They can drive, work and in some places they might drink. Having this new freedom makes them want to enjoy it as much as they can, without thinking about the consequences. They haven’t actually had to deal with the consequences of any of it yet. They are finally free and can do things that they couldn’t before, so they tend to do them without moderation. Spending money is one of those things.

Teenagers who have jobs finally have their own money. They can now buy things on their own and spend however they like. It’s not easy to convince them to save and invest. They tend to live for the now and enjoy the moment. So in order to help them save and invest you need to look at things from their perspective. First, you need to speak to their emotions. Then, you can help them with a plan.

Here are some ways to help you teenager save and invest:


Work with their feelings

Teenagers often act on their emotions. Speak to them in a way they can relate to and get them excited about what they can achieve by saving and investing. Speak of things they enjoy and also things they don’t like right now and can avoid. This might be just enough to get them started.

For example, chances are your teenager does not yet have a career job and is working for minimum wage. Of course that is not always the case, but let’s say it is the most likely scenario. They probably don’t enjoy their jobs that much, they just do it for some experience and a pay check.

You can ask them to imagine not having to work a job they don’t like. Having the freedom to find projects they are passionate about, or even to take time off until they find work they truly care about. And tell them they can do all that and still enjoy life right now.

Work with their dreams

As well as working with their feelings, you can help them get started by working with their dreams. Different from feelings that they are experiencing right now, dreams are big things that they want to achieve one day. Perhaps your teenager wants to live off grid in a homestead one day. Maybe they want to move to Australia to surf. Or maybe they want to start a nonprofit organization.

Of course their dreams might change over time, and they might not make sense to you. But be understanding and feel excited with them. It’s okay if things change. You are still teaching them that they matter, and to go after what they want. If they have a dream that they care deeply about, it might be just enough to help them get excited about saving and investing.

Help them prioritise and plan

Once they are excited about saving and investing, help them create a plan. Look at the numbers together, see how much they can invest each month and how it may compound over time. Do some hand-holding and sit down with them to open investment accounts.

Allow them to make their own choices about which percentage will be allocated to what. But help them have their priorities clear. What is more important to them, freedom to travel or spending more than necessary on clothes? What do they want more? Everything is a trade-off, and you can help them see this. Also help them plan small milestones that can be achievable.

Make sure to be future-focused, but also leave room for enjoying the present. They can still go out with friends and buy those shoes, but all discretionary spending can be planned.

They might not have much to invest at this stage, but the goal at this stage is to build understanding of money management and develop a habit of investing.

Teach about delayed gratification but track and celebrate

Once they have the desire and the plan, it’s all about consistency. Talk to them about delayed gratification and also be a role model. You don’t plant something to harvest the next day. Rewards can take time and work, but are worth the wait.

This type of strength can’t simply be taught, it needs to be developed over time. Help them practise patience and self control in other areas of their lives as well.

In order to make all this more achievable and fun, make sure to track and celebrate each small achievement. Maybe they’ve achieved their first $1000 in investments. Maybe they managed to invest a higher percentage this month. A great way to track their achievements is by using visuals graphs. It can be very motivating for them to see them getting closer and closer to their milestones.

And of course, celebrating can be done inexpensively or with a planned budget 🙂

Do you have a teenager at home? How do they feel about saving and investing? Let me know in the comments below.

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