How to manage your money: A guide for schoolchildren

Managing your money as a teenager is an important skill that can set you up for financial success later in life. Not only that, it will instill a sense of responsibility and make you understand how the world functions. Moreover, isn’t it a good idea to share the weight with your guardians and parents and know the value of money while growing up? I think, yes!

Mr Rudrendra Basak, Principal at Apeejay School, Charkhi Dadri in Haryana says, “In my school, a Financial Literacy programme by the Central Board of Secondary Education (CBSE) for classes 6 to 8 was introduced recently. At present, the programme is active for class 8 students.” Further, he mentioned how he has already set up a bank account for his daughter, who studies in class 7, as she won an annual scholarship worth 6000/-. He is now educating her about the right way to utilise this amount and manage it.

In addition, Mr Basak advises students to always have a store of money, especially take good care of the monetary rewards they receive from family and relatives. According to him, more and more students in Haryana are taking a step forward to pay their fees themselves in the school to understand how the process system works. “Students must also make an attempt to know the taxes better. It is the need of the hour,” he says.

So, here are some tips to help you manage your money as a teenager:

Create a budget: Start by figuring out how much money you have coming in and how much you spend each month. This will help you see where your money is going and make it easier to control your spending.

Set financial goals: Decide what you want to save for and create a plan to reach those goals. This can be anything from saving for a phone or college to building an emergency fund.

Track your spending: Keep a record of your expenses so you can see where your money is going. This will help you identify areas where you can cut back and save more money.

Avoid impulse purchases: Think before you buy and avoid spending money on things you don’t really need. It’s easy to get caught up in the moment and make purchases you later regret.

Use cash: It’s easy to overspend with credit and debit cards. Consider using cash for your purchases so you can see exactly how much you’re spending.

Start investing early: The earlier you start putting your money in investments, the more your money will grow. Even small amounts saved regularly can add up over time.

Get a part-time job: Consider getting a part-time job to earn some extra money. This can help you build your savings and gain valuable work experience.

Avoid debt: Be cautious when using credit and avoid taking on debt you can’t afford to pay back. Interest charges can add up quickly and make it harder to reach your financial goals.

Remember, these tips can only work if parents and guardians are willing to part their responsibilities with their children. Sharing his pearls of wisdom for parents, an educator at Apeejay School, Panchsheel Park in Delhi says, “This isn’t just about responsibility but also translates to the ability of students to think and analyse situations critically. Life shouldn’t be a bed of roses for them because it simply isn’t. So, they (children) must understand financial planning and make expenditures according to the limit decided. In fact, I do it with my children too. I have set the funds suitable as per their age bracket. So, whether it is a coffee outing or a birthday party, they make a conscious choice as to what is urgent or important.” Besides, the expert opines that abundance of anything is harmful. Therefore, young minds should respect and utilise the available resources wisely.

Speaking on how students can start learning about finances in school, Mr Namit Sacheti, a Chartered Accountant says, “Students must start learning about mutual funds and investments after class 9. That’s the right age! Besides, if they are keen to save early on, opening a PPF account is the way to go! In some years, they will reap its benefits.” His daughter, Kaashvi, studies at Primary-Years-Programme I at Apeejay School International – South Delhi. When asked on how he plans to do it for her, Mr Sacheti says, “I will advise her to explore Mutual Funds and Systematic Investment Plan (SIP). However, this will be only after she turns eighteen because it involves having accurate knowledge.” 

So, take a step back and start now! Slowly but surely, you will get hold of your finances.