School’s out, and millions of teens have taken summer jobs. Jonathan Carr, founder of Choose Success – a non-profit dedicated to promoting financial literacy amongst adolescents – offers 3 Tips for Helping Teens Handle Money Responsibly.
Tip #1 Build Wealth: Time is Your Friend; Use It!
Teenagers are incredibly powerful investors, not because they usually have a whole lot of money to manage, but because they have something even more valuable: time. They have the power of compounding interest, which Albert Einstein called the most powerful force in the universe.
If a person starts putting away only $20 a week at age fifteen, and does it every week, they can easily retire with a million dollars, with only average earnings on that money over time. To show the power of being fifteen, if that person waits ten years and starts saving $20 a week at age twenty-five, that million dollars will be reduced to $450,000 by retirement age. Make life easier, start saving early and save a little each week.
Tip #2 Don’t Get Poor: Stay in School and Study Hard.
More education means more money, which means more fun, which means more happiness. It is that simple. If you want to have a fun and happy life, stay in school as long as you can. Getting a high school diploma increases our average pay by twenty five percent.
Tip #3 Don’t Get Poor: Having Children.
Having a child as a teenager is the easiest way to throw ourselves and our children into poverty for the rest of our lives. Being a parent makes it hard to handle school, so many young parents drop out of school as well. It takes $12,000 a year to take care of a baby. High school dropouts make minimum wage, about $8.00 per hour or $16,000 per year. Sixteen thousand dollars for the family minus twelve thousand for the baby equals poverty for everyone.
Jonathan Carr is a former financial adviser and author of Fixing Capitalism, which proposes Networked Capitalism – a new approach to fixing the economy, available on Lulu.com and other online booksellers.