Why do we have to change money at young age?

Today, one in five young adults are relying on their parents to help make rental payments, while others are making the move back home in adulthood to save money for a house deposit.While the Bank of Mum and Dad can be helpful in an emergency, it might help to think about how to really help the next generation to prevent them from getting into these tricky financial situations.Introducing simple finance basics from childhood, can help youngsters to familiarise themselves with money, learn simple savings techniques to adopt good spending habits, and help to set themselves up for what they want to achieve in life.Young age is the best time for saving money. However most people of the young generation are much fonder of spending money but a little saving can bring in a great change in their future. They often have a misconception that saving money is sacrificing enjoyment. True, but not totally. As said sacrificing a little will bring in a great change. Most of the time people do not get the importance of saving money at early age yet they need to know that. Let us have a look at the importance of saving money at the early age.Starting to save money at the early age assures a secured old age. Basically at early age young people do not have any such expenses as all their responsibilities are fulfilled but their family. But as the time passes responsibilities arise. However the source of money rises but after fulfilling all the commitments a very little left in hand to save. Therefore it is always better to save as much as possible when responsibility is less but money is more. If someone plans to start saving fewer earlier than retirement instead of young age he will have to work very hard. The advantage of saving at early age is one does not need to save a lot as he/she has a long time for the old age to come. But after stepping into mid age he/she has to save at his/her best as then time falls short.We all have evidence for the fact that at some or the other point of time, that practice we start at early age last almost lifelong. Therefore once one gets habituated with saving money at early age will never stop it and this practice will help him/her to save money lifelong securing life for all age. Saving is a great tool to avoid borrowing. In life when family responsibility, children’s education, house etc. become the most important necessities, people often go for loans or financial credits for support. But self financing is the safest way. If one can save from early age he/she can avoid borrowing in the future and lead a debt free life. Now-a-days getting a suitable job is very tough and people are often found switching jobs. In the time of transforming from one job to another there will always be a gap. If you have saved some money, it will not be tough to spend a time without salary. A very important expense of any one’s life is medical expenses. No one knows when the need of medication arises. Therefore it is very important for everyone to save money for their medical treatment. If the saving practice is started at early age it becomes very easy to overcome any emergency situation. Last but not the least is retirement. A retired life is for relaxation and leisure. If one start saving money at an early age, he/she can save a lot of money for retirement that will help him/her to lead a secured and relaxed retired life.Saving as a child, could set your kids up for a secure future, without needing to move back in with you to save for their first home deposit. So it’s important to introduce them to good saving techniques early on. Teaching them ‘Spend, save, share’ could introduce healthy attitudes to the amount of pocket money they can spend, the amount to put away, plus with a little charity added to raise socially aware adults. Raising your kids with an understanding of what to save or spend is laying the foundations for budgeting in later life. Good budgeting makes being an adult a lot easier. Understanding the balance of income and expenses help to ensure that bills are paid on time and holidays are jetted off to. Taking the time to set a weekly pocket money budget, could be worth more to your kids than you may think in their adult life. Saving doesn’t come naturally to most of us. When you’re young, it’s hard to grasp the real value of money. You might watch your friends blow lots of cash on new clothes and toys, or living beyond their means with credit. Young Invincibles might feel little reason to save, because all of their needs are met, and there’s so much more life yet to come.Once you’ve spent two or three decades on earth, you start to understand how hard it is to make money. You also learn how unpredictable life can be. Jobs disappear. Health fluctuates. Marriages and partnerships come to an end. Without savings, it’s hard to live a stable life as you get older. People who start saving young put themselves at an enormous advantage as life goes on.If you’re young and debt-free, congratulations. Here are a few ways to make the most it, through saving and early investment.This is How People Save MoneySave Before You Spend. Whenever you get money from any source, put some of it into savings before you spend on anything else. A 15% savings rate is a good goal for most people, but young people can sometimes save far more. If you live with your parents, or otherwise have your needs met by other people, save as much of your disposable income as possible. Saving and investment started early in life using Motley Fool picks will reap much greater rewards than those begun decades later.Work Out a Deal With Your Parents. This won’t be possible for everyone, but take advantage of this if it’s possible for you! Some parents/grandparents/guardians will match your savings. That means if you are able to save $25 from your weekly paycheck, your parents might be willing to give you $25 more. Some parents are more than willing to give their children money for the future, especially if it is put in an account which is not accessible until later in life.Consider Opportunity Costs for All Purchases.One of the most important aspects of investment is compound growth. Through the power of interest, dividends, and reinvestment, conservatively invested savings can double or triple in 10 years, sometimes multiplying by 10x in 30 years. Obviously, the earlier in life you start investing, the longer you’ll have to let it grow. Every time you spend money as a young person, you are depriving yourself of wealth later in life. Think about that the next time you buy a $50 video game. Is it worth missing out on $150 in 10 years, or $500 in 30 years?If you’re a parent to teens, have you thought about helping them develop a savings habit? As your kids get closer to adulthood, embracing and becoming effective at saving could help with everything from self-reliance to discipline and confidence. Learning to save for both the short and long term could give your teenager important life skills, and it could help them get started on the path to financial security.1. Mastering savings is a key financial skill2. Learning to save is a fundamental financial skill because being an effective saver is essential for everything from managing expenses to long-term wealth-building. Without learning discipline, planning, and diligence, paying bills would be a challenge, not to mention saving up for major items like holidays and home deposits.3. Foster self-reliance and independence4. Encouraging your teen to be a successful saver could set them up for financial independence and self-reliance in their adult years. Since you're encouraging your teen to save for things they want to buy, it can help them become more responsible in general. By setting and achieving realistic goals, teenagers grow in confidence about their own power to achieve financial goals and direct their lives.5. 3. Encourage sensible spending and discipline6. A good savings habit, along with budgeting, allows your teenage kids to develop discipline, a universal skill they can apply to other areas of their life. Reinforcing a habit by practising it over time helps it to last a lifetime. Having a disciplined approach to money could make it easier to distinguish between wants and needs.7. Since money is finite and our wants often exceed our spending power, learning to save encourages your teens to think about things like trade-offs and opportunity costs, which could then lead to smarter spending choices. They could end up being better judges of whether something is a good buy, learning to avoid impulse purchases.8. A teenager might better understand the value of something because they're forced to link the money they want to spend to how long it takes to earn or save. Teaching your teenager to set savings goals could give them a sense of satisfaction and achievement, leading to a cycle of positive reinforcement.7 Compelling Reasons to Encourage Your Teen to Save Money, Starting Today4 min readAdultingInternships & Graduate rolesMoney HabitsStudent JobsStudy lifeSuperannuation 101HomeBlog7 Compelling Reasons to Encourage Your Teen to Save Money, Starting TodayIf you’re a parent to teens, have you thought about helping them develop a savings habit? As your kids get closer to adulthood, embracing and becoming effective at saving could help with everything from self-reliance to discipline and confidence. Learning to save for both the short and long term could give your teenager important life skills, and it could help them get started on the path to financial security.1. Mastering savings is a key financial skill2. Learning to save is a fundamental financial skill because being an effective saver is essential for everything from managing expenses to long-term wealth-building. Without learning discipline, planning, and diligence, paying bills would be a challenge, not to mention saving up for major items like holidays and home deposits.3. 2. Foster self-reliance and independence4. Encouraging your teen to be a successful saver could set them up for financial independence and self-reliance in their adult years. Since you're encouraging your teen to save for things they want to buy, it can help them become more responsible in general. By setting and achieving realistic goals, teenagers grow in confidence about their own power to achieve financial goals and direct their lives.5. 3. Encourage sensible spending and discipline6. A good savings habit, along with budgeting, allows your teenage kids to develop discipline, a universal skill they can apply to other areas of their life. Reinforcing a habit by practising it over time helps it to last a lifetime. Having a disciplined approach to money could make it easier to distinguish between wants and needs.7. Since money is finite and our wants often exceed our spending power, learning to save encourages your teens to think about things like trade-offs and opportunity costs, which could then lead to smarter spending choices. They could end up being better judges of whether something is a good buy, learning to avoid impulse purchases.8. A teenager might better understand the value of something because they're forced to link the money they want to spend to how long it takes to earn or save. Teaching your teenager to set savings goals could give them a sense of satisfaction and achievement, leading to a cycle of positive reinforcement.9. 4. Many kids start earning money when they’re a teenager10. Learning to save is important at any age, but it's especially critical for teens because that's often when they start earning an income for the first time. Whether it's a first job in retail, hospitality, or something else, your teen kids would do well to learn about saving by the time they start getting regular pay.11. 5. Prepare them for access to financial products12. The teen years are also an important time for your kids to master saving before they have access to a whole range of financial products. When they’re 18, they’ll have access to a range of products that could include credit cards, payday loans, and mobile phone contracts. You'll want them to be fiscally responsible and have a degree of financial independence by then, so they make good decisions when it comes to new financial products.13. And what better way to encourage money accountability than ensuring they're great savers by the time they turn 18?14. 6. Set money goals and achieve them15. Learning to save includes teaching your kids how to set money goals to build wealth, and thinking about what they want their money to do for them into the future. While it’s easy for them to focus their present lifestyle, taking charge of some of their own spending and saving goals, aiming to look ahead at least three months, will show them to understand wealth in the long-term. Help your teens develop other positive traits like planning, goal setting, and delayed gratification by sitting with them and making a list of their financial priorities over the next one to three years. Devise a realistic plan and encourage them to stick to it.16. 7. Maximise the power of compound interest by starting early17. Becoming a successful saver from a young age comes with long-term benefits, especially when it comes to growing a financial nest egg. The magic of compound interest means the earlier you start, the longer your savings have to grow, so event modest amounts can grow into a large sum. Talk to your teen kids about how compound interest works over time and use actual numbers to illustrate its power. Show them how regular, small savings can be transformed into significant amounts over time, through interest as well as other options like investing and super.