The Essential Money Lessons for Teenagers in the UAE
While the parents out there want to equip their children with the best of education and the best quality of life, what they often forget is that they also need to equip them with wise money habits that are going to stick with them throughout their lives.
Therefore, as a parent, you should be certain that your child knows proper money management in UAE and is prepared to face the real world while being financially independent in life.
10 Things Every Youngster Should Know About Money
Here are a few things that every teen should know when it comes to money management in UAE.
Good Money Habits
The earlier your child learns about finances, the better. The young generation does not need to know in-depth about how mortgages or loans work, but they should be aware that money needs to be earned and they should work towards saving the pocket allowance towards something they wish to purchase. This will go a long way in the future when it comes to money management in UAE.
You Need To Work To Earn
In the UAE, it can be hard for young people to get a part-time job. Which makes it even more important for parents to teach their children that money needs to be earned. You can make your child work on some chores, for which in return they can get the monthly allowance.
When you make your child financially independent by giving them the freedom to manage their monthly budget, they will learn the importance of spending only on what they can afford and how to face any unexpected expenses. It is important not to allow your teens to overspend, which is why you should not allow them additional funds just because they have exhausted their monthly allowance. It is good to teach this when they are young instead of them facing real financial troubles in the future.
Staying on a Budget
You should teach your teen the importance of preparing a budget and sticking to it as early as possible. They should prepare a detailed plan on how they will spend their monthly allowance, and then figure out their estimated expenses. These expenses could be transport, clothes, going for outings, etc. even if they are staying at home. Their allowance should be treated as their disposable income. Sticking to a budget is a key step when it comes to money management in UAE.
Management of Debts
It is a part of life that people borrow money. However, it is vital for your child to know the difference between types of loans and credit cards. For instance, a student loan is strictly regulated, repayments are usually payable only once the person finds a full-time job. Whereas, credit cards should be avoided since it is easy to spend on a card and build up a debt that charges you high interest.
How to Compare Accounts
There are many banks in the UAE and in other regions across the globe that offer accounts that are specifically targetting the younger generation in the market. There are various exclusive benefits offered by different providers generally in the form of vouchers, complimentary travel cards, deals at top restaurants, etc.
Reading the Small Print
It often seems boring and like a huge task when you have to read those ant-sized fonts. However, this can help you in avoiding mistakes. Sometimes you may end up finding charges or penalties that are not explained. These can be important to consider in order to make wise financial decisions. Teaching your teens to do this from the start will help them in avoiding any mistakes in their financial future.
Watching Credit History
Credit history plays a major role while evaluating an individual for a loan, credit card, or mortgage. It is extremely important to hold a positive credit history in order to get approval for the same. A positive history also helps in obtaining attractive interest rates on any future loans you may have to take.
Staying Safe from Fraud
In today’s age, financial fraud has become common and people end up losing a large number of funds in banking related scams. You should teach your teen from the start to stay safe and not share any financial or personal information either online or in-person. Their information should be kept safely stored in their wallet or bag. UAE being a safe country tends to have a low rate of thefts, which is why some people forget the risks involved when they are not in the UAE.
One key rule to keep in mind is that it is never too early to start saving. As a teen, your kids don’t need to start saving towards their retirement, but it is important to teach them the habit to save for some financial objectives they may have, such as saving towards a vacation, or to buy a car or an electronic they like, etc. It is beneficial to get into the habit of saving as soon as one can!
The Bottom Line
It is a fact that money management in UAE, in fact anywhere in the world, does not sound exciting at all. However, it is a skill that everyone needs to develop in life, and the earlier they do, the better it is for their financial future.