It can be hard to encourage your teen to save if you find it hard to save yourself. Saving is a difficult habit to start but one of the most rewarding habits to have. So it’s worth the ‘trouble’ to get used to.
Talk about your Success & Regrets
Before we can motivate a teen, or anybody, for that matter, to do something, they have to know why. So why should teens save? They have to know the benefits of saving vs the drawback of not saving. If not, there just won’t be any incentive for them to start.
What could be more convincing than dipping their toes in a 3D movie of their parents’ successes & failures? Well, not exactly 3D but you can try your best to describe your experiences (with intense emotions, if you prefer) so they can understand what it’s like to be on either side of the spectrum. This would be more effective than giving them a hypothetical future situation for them to think about. We all know, teens don’t really care much about the future, they only care about the present.
But what if they could see the fruits of your success right in front of them, or the regrets you have, also right in front of them? That would speak right to their soul.
I’m talking about telling them how difficult it was for you to save up for _________ but you managed to pull through and reaped the benefits.
Or, you can tell them how you had neglected to save, and look what you could have reaped if you had just saved $xx per month for the past 10 years.
Show them uncertainties, either through your own experience or someone that you know. Who lost a job and had no savings? Who lost a job and had savings? What different things did they go through?
Fill them with proudness, fill them with sorrow, fill them with real life feelings of having diligently saved and/or having not saved at all.
Be mindful not to bombard them with ten stories at once. Insert these stories in casual family conversations. Over time, your teen will have a sense of how important it is to have money set aside for savings.
Provide monetary incentive
A lot of financial advisors advise parents to match their teen’s savings as a form of incentive. I would say that this method is training your teen to expect too much from their savings. In real life, very few will get 100% returns from savings. Actually, I don’t know who does.
Thus, if your finances allow, in order to still provide an incentive, we could give our teens 25 cents for every dollar saved. That is $25 for every $100 saved. Why? Teens need a little push. Let’s just admit that. But we don’t want to make it too easy for them, because when they become adults, things aren’t going to be easy, especially when it comes to personal finance. So I would say 25%-50% incentive is good to go.