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Easy Investments for the Teenager

Posted April 7th, 2010
by PersonalLoans.org Staff

It is never too early to help your teenager on the road to financial freedom. Just a few simple steps can help your teenager from running amuck with personal loans and credit cards. Here are a few ideas to get that ball rolling.

Budgets are the word of the day
This is becoming a long lost art. Budgets are a great way to teach those teens how to plan the use of their money. You don’t want them running around all willy-nilly with what cash flow they have. This just leads to bad spending habits and personal loan debt anchors.

You should sit down on a weekly basis to figure out your cash flows. This is no different for your teenager. Do this together so that you can teach them your pitfalls to help them avoid those dangers. Point out the fact that they blew over a hundred dollars in movies and food during the week. Good lessons now lead to good knowledge later.

Start a savings account now
You might think that just opening a savings account for junior is good enough. This will not do for the long run. You need to sit down with your children and start going over items like interest rates and how interest works. If you can’t explain it, sit down with someone at the bank who can.

Even better would be to let your teenager do some savings account shopping. Give them a goal and let them do the work. Talk with them about their decision. This all might sound like a lot of work, but you are trying to keep your kids on the road to riches. You take care of them now, and they could take care of you later.

Stocks for some investing know how
This item might be a bit scary with all that has recently happened in the stock market. This should not cause you to turn your nose away. You are never to young to learn about the advantages of investing in good companies.

Even if you don’t know much about stocks, there is a wealth of information at your disposal. Talk to an investment broker with your teenager. Do some online research with your teenager. Who knows, you just might find you want to do some investing as well.

The key factor to remember is that this is a long-term investment. Very few people become overnight millionaires from investing in stocks.

CD accounts for long-term savings
A CD is an investment. Your teenager will also need a larger sum of money to invest into this savings account. We are talking $2,000 or more for investment.

This deposit becomes a hands-off account for a specific amount as well. The length of time will very on the CD of choice. This usually ranges from six months to five years. Make sure you point out how much money your teenager can make with a longer deposit.

This is not rocket science. Take some time to sit down with your teenager and teach them about personal finance. The last thing they should be doing is asking you to cosign for a personal loan so they can keep on blowing money. A bit of education now will go a long way down the road.

Photo via Vanessa Yvonne

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