Young adulthood can feel like living in a void between childhood and adulthood. You are a not little kid anymore, but not an adult yet. But once a young person heads off to the next stage in life, such as going to college or getting a job, they need to be able to manage their own finances. The following are five money management skills young adults should not leave home without.
Knowing how much money they have. True story: there was a young entrepreneur who didn’t know how to count his money. He had an employee who counted and collected money for him. Several years later, the man died with barely a few dollars in his name. Two years after his death, his employee bought a new house. Lesson: teach your children how to count their money. It may sound too simple, but it shouldn’t be taken for granted.
Reading a bank statement. With almost everything digital today, many young adults didn’t probably got a chance to look at paper bank statements in their lives. Being able to figure out the numbers in those statements is important . Get it in the habit of showing your children how an account statement looks like. Better yet, bring them to banks and introduce them to things like deposit slip, withdrawal slip and the like.
Maintaining a simple budget. Budgeting can get a little complicated as you get older. For a young adult however, the basics will do. Teach your children how to divide their money for their various needs and wants.
Separating wants from needs. The hardest thing about being independent, about having to budget your own money, is deciding between needs and wants. In their transition to adulthood, many young adults are embroiled in credit card debt because they continue to put their wants before their needs.
Creating a good credit history. As much you would like your young adult to stay out of debt, remember that having no credit history is almost the same as having a bad credit history. Teach your young adult how credit works and how to use it responsibly.