What is Money?
Have you ever played the game Monopoly? You start with a certain amount of money, invest in properties, pay taxes, and sometimes even go bankrupt. It's all fun and games until someone flips the board because they've lost everything to Mayfair with a hotel on it!
But How would you feel if I shared with you that life is somewhat like an elaborate game of Monopoly? And just like any game, mastering it requires understanding its rules - in this case, the rules of money.
Now hold on! Don't roll your eyes yet. We're not talking about dull economics or complex stock market strategies here. Instead, we're going to explore some simple yet powerful money skills that can set you up for financial freedom as a teen.
Money and goals
Let's start with a simple truth: Goals are dreams with deadlines. They give us direction, purpose, and a clear path towards what we want in life
In my years of personal experience with people who wish they had learned about finance at an earlier age, I've found that those who grasp these concepts early on are more likely to attain their financial dreams. And let's face it - we all have dreams, whether they're owning a house, traveling around the world or starting our own business.
Goals are indeed dreams with deadlines, and understanding your finances is key in making those goals come true...
Whether it's buying those dream sneakers or saving for college tuition fees - having clear financial goals will motivate you to stick with your budget and continue saving.
But here’s an insider tip most people won’t tell you about - make sure these goals are SMART (Specific, Measurable, Achievable, Relevant, Time-bound). This means instead of saying "I want to save money", say "I want to save $200 for a new phone in 6 months". See the difference?
Spending Smart!
Delayed Gratification Game:
___The Marshmallow Test
Remember the famous Stanford marshmallow experiment? Kids were given one marshmallow with an option to eat it immediately or wait 15 minutes and get two instead. This is delayed gratification in action - resisting an immediate reward for a bigger one later. Apply this principle when shopping; hold off on instant purchases and save up for something more significant.
#1: Needs vs Wants Warzone
In the battlefield of spending decisions, 'needs' are your foot soldiers while 'wants' are cunning spies trying to infiltrate enemy lines. Always prioritize needs over wants - necessities like school supplies or healthy meals come before non-essentials like concert tickets or trendy sneakers.
#2: The 30-Day Rule: Your Spending Shield
This rule is a powerful defense against impulsive buying. If you see something you want but don't need, wait 30 days before purchasing. Often, the urge to buy will fade and you'll realize it was just a fleeting want.
#3: Shopping Smart: Unleashing the Bargain Hunter
Who said smart spending means not shopping at all? It's about being a clever consumer - comparing prices, hunting for discounts, using coupons and cashback apps. It's like embarking on a treasure hunt where the prize is savings!