Teenagers that do not know how to manage their money will grow up to become adults with money problems, perhaps passing on bad habits to their own children.
Getting control over money absolutely matters. What also matters is beginning a lifelong discipline for acquiring, saving and using money wisely.
1. Protect your identity. First things first — Your personal identity can easily be stolen and is something you should guard as tightly as you manage your wallet. Never give your Social Security Number to an unrecognized individual — only your school or your financial institution needs this information. Unscrupulous individuals that gain access to your personal data can steal your identity and your money.
2. Save some, spend some. As soon as you begin to make money, plan to save some of that money for future goals. Like a car. New clothes. Your college education. Quite easily, cash from your part-time job can add up and disappear immediately too. Always save some of what you earn to meet financial goals that can help you succeed in life.
3. Watch those cards. Most teenagers under the age of 18 cannot get a credit card without parental permission and a signature. If you are 18 and have been working for a while, then you have already built up credit through your checking account and your debit card. Consider that a credit card can be a good thing if you use it wisely to buy only what you need. Pay your balances off monthly and avoid subscriptions that can add to your costs each month.
4. Understand your credit. Every consumer has a credit file on them. Multiple files at that. Companies such as TransUnion, Experian and Equifax will track your spending habits and determine your creditworthiness. You can get one free copy of each of these reports annually through AnnualCreditReport.com. Review your report and make corrections, if needed.
Teens that learn how to manage their money will become adults that will do likewise. A budget can help you keep your finances under control and allow you to save for far larger goals without using a credit card. Keep in mind that accounts opened with your parents co-signature will not help you establish credit. Co-signing a loan is not a bad thing, it just is not considered by creditors if you are seeking to develop credit on your own.
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