Home' Trinidad and Tobago Guardian : March 15th 2015 Contents SBG12 PERSONAL FINANCE
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt MARCH 15 • 2015
Gaining the knowledge and developing
the skills to become financially literate
is a lifelong process that begins with
something as simple as putting a few
pennies in a piggy bank, and evolves to
more advanced subjects such as risk
and asset allocation. Some parents may
have a difficult a time talking with their
teenagers about money, but it's critical to their survival in the
Unsure of where to begin and worried about saying the
wrong thing, many adults simply avoid conversations about
money. This is often made worse by adults' lack of confidence
in their own handling of finances. It is important for adults
to remember that they have experience and perspective on
their sides, and can draw both from their financial mistakes
and successes to share essential knowledge and skills to their
Practice what your preach
Perhaps the best way to encourage a savings habit in your
teenagers is to be a saver or investor yourself. Teenagers are
likely to put more credence in your message to save or invest
if you already practice what you preach.
It is important that you examine your own attitude towards
money so that your words of wisdom to them do not ring
Teenagers are notoriously effective at identifying the incon-
sistencies between parents' stated values and their actions.
Teenagers are also likely to be more receptive when you talk
in terms of their needs. Before you start imparting to them
the value of money---and run the risk of nagging more than
teaching---understand that teenagers may not yet understand
the value of delayed gratification. If you don't talk about
money, your kids may end up thinking that it grows on trees
and they don't have to worry about it.
Early exposure to goal setting helps to give them patience
Value of budgeting
Instill in them that good money management starts with
a budget. This tool is priceless to developing lifelong money
management skills. To help your teenagers get off on the right
foot, let them appreciate the benefits of income and expenditure.
Your teens must appreciate that some items will take longer
to save for than others.
Help them set their goals and show them that they need
to take responsibility for the way they spend their money.
Teach them about having goals, both long term and short
term. Early exposure to goal setting helps to give them patience
and vision, two things they'll need in life.
As a parent, you can illustrate the importance of investment
by pointing out how your teenager enjoys everyday necessities.
For example, how much of your salary goes towards paying
for the mortgage and paying the installment on the car. This
makes work seem less like an oppressive task and more like
a necessary part of life.
You should involve your teenagers in simple financial tasks.
By introducing your soon-to-be adults in the daily grind of
paying the bills, balancing the checkbook, depositing and
withdrawing from banks and even managing a TT income
fund account that invests in a diversified range of fixed income
securities. They will have a broader view and better appreciation
of how money works.
Benefits of investing
In order to sow the seeds of a saving habit, encourage your
teenagers to take a trip with you to an institution where they
can learn the value of investing. Seeing how money can grow
through the power of compound interest (income earned on
income over a period of time) can be a real incentive to any
As part of its thrust to encourage saving and investing, the
UTC has a suite of mutual funds that are tailored to meet the
changes in their lives. For instance, the growth and income
fund, where the fund is invested in shares of local companies
trading on the stock exchange, government and government
and guaranteed bonds, short term securities and foreign invest-
ments, is a great way to show teenagers the value of investing
for the long term.
For parents, an added incentive to develop a savings culture
is to match their contributions. Whether they make money
by helping set up a Web site or washing the neighbour's car,
matching their contributions is a surefire way to encourage
savings. By doing so, you can motivate your teenagers to save
towards reaching their financial goals.
In these difficult financial times, teaching your teenagers
what to do and what not to do when it comes to saving and
investing is more important than ever. Don't waste any more
time as their financial health is at stake.
The earlier you can teach your teenagers about the benefits
of saving, the better prepared they will be to manage their
own money in their adult life. Teens can be frighteningly igno-
rant of the value of saving and investing, so the earlier you
address it, the better.
Unit Trust Corporation
Teach your teenagers to:
Tips for teaching teens about
improving financial literacy:
Cut back: You and your teenagers can come up
with ways to cut down on their spending so they can
save more money. Encourage them to put this
money into a TT Income Fund account where they
have easy access to their funds. Only TT$100 is
needed to start.
Save for future goals: Understand that teenagers
can learn a lot by deferring instant gratification. Sav-
ing for that mobile phone can be invaluable. With a
budget, you can identify areas of extra spending and
reallocate that money towards a future goal.
Check Up: Check in with your teen monthly to as-
sess their financial situation. Help them review to en-
sure they stay on track with their savings.
No credit card: Don't give your teenager a credit
card. Many children think of credit cards as a magic
wand they can use to buy things, without ever think-
ing of the real cost of an item.
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