The Forbes list of the wealthiest people in the world is full of people who started their companies as teenagers. People like Mark Cuban, Bill Gates, and Michael Dell made their fortune before they turned 20. This is a testament of the importance of the teenage years to a person. Sadly, many young people are wasting their teenage years by doing several mistakes. In this article, we will look at some of the most common teen money mistakes to avoid.
When I was growing up, my parents told me, “finish your dinner. People in China and India are starving.”. I tell my daughters, “finish your homework. People in India and China are starving for your job”. Thomas Friedman
Teen Money Mistakes: The Wrong Course
Most people start college in their teenage years. Unfortunately, this is a stage where these people make a lot of their mistakes. Studies show that many young people do courses that are not very marketable in the job market. Examples of courses that are not recommended include the likes of fashion design, history, library science, and drama.
There are three reasons why such courses are usually not recommended. First, the courses don’t have a lot of demand in the job market. Second, these courses don’t give students real skills to apply in case they don’t find a job. Third, the courses don’t pay very well. For example, a Library scientist earns less than $40,000 every year. Also, the number of libraries are reducing. This means that companies that need librarians have more supply than demand.
How to avoid choosing the wrong course
To avoid this mistake, we recommend that you do the following:
- Consult professionals to get information about the future of work.
- Look around you and find opportunities that will work well in the future.
- Before you take a course, think about how the industry will be in future.
Teen Money Mistakes: Dropping Out of School
Many teenagers are known to dropping out of school. Studies have shown that people who go through college make more money than those who dropout in high school. The reason is that most high-paying jobs require a background in college. In fact, studies have found that people with a masters earn $17,000 more than those who hold a normal undergraduate degree. $17,000 big ones. Those with a bachelor’s degree make much more money than those without.
Therefore, if you are a teen who is thinking about dropping out of school, we recommend that you give it a thought. It is a mistake that you could regret for the rest of your life.
Teen Money Mistakes: Not Starting a Business
Business is not for everyone. This statement means that not every person can succeed as an entrepreneur. The best time to know whether you can be a successful business is in your teenage years. As mentioned above, history is made up of many billionaires and millionaires who started their companies during their teenage years.
There are several reasons why you should consider starting your business as a teen:
- You don’t have a lot of responsibilities.
- You are free to fail. If you do, you can always go ahead and get a good job.
- You have a lot of free time that you can use to run the business.
- It will help you start saving for retirement early in life.
Teen Money Mistakes: Being Extravagant
YouTube, Snapchat, Instagram, and TikTok have helped create a culture of consumerism. These platforms show people who are living the perfect lives. As a result, companies have started to target teenagers in their marketing campaigns. For example, companies like Apple and Microsoft have recruited influencers to market their products.
All this has made many millennials and teenagers be focused on consuming. These young people want to buy the latest iPhone and the latest Microsoft Surface devices. All this has led to the increasing levels of debt among young people. Having a good budget can help prevent this.
Unfortunately, teenagers who get themselves into debt rarely succeed in life. This is because a substantial amount of their income go to servicing their debt. Remember, when you get into debt, you become its slave. Some of the common items teens should avoid are:
- Brand new devices like iPhones and Apple Watch.
- Subscription boxes like BirchBox and Dollar Shave Club.
- Expensive fashion like Gucci and Prada.
- Fancy restaurants
Teen Money Mistakes: Not Saving for Retirement
A common mistake many teenagers do is to not think of retirement. They think that the retirement period is very far. This is a big mistake that these people live to regret. If you are below 20, it is wise for you to start thinking about your retirement. For example, if you start saving just $20 every month when you are 15 years, you will have more than $11k – plus interest – when you turn 62.
If you start saving the same $20 when you are 30, you will have more than $7k when you reach 62. Also, remember, you can expect to live for more than 15 years after you retire. Therefore, we recommend that you start saving for your retirement during your teenage years. You can do this by working part time and doing some side gigs like graphic design and website design.
Being a teenager is an amazing time and a hard time. It is when you make your best friends – I have girls who will never leave my heart and I still talk to. You get the best and the worst as a teen. You have the best friends and the worst heartbreaks. — Sophia Bush
Teen Money Mistakes: Not Learning New Skills
As a teen, the biggest asset that you have is time. You have a lot of free time that you can use to advance your career. As such, even when you are in college, we recommend that you start investing in new skills. Fortunately, there are many platforms that will help you start learning new skills. These include platforms like:
- Khan University
The teenage period is the most important one to every person. It is where the foundation of their lives is established. It is also a period where you are actually allowed to make mistakes. Therefore, you can set a good foundation for your teenage life by avoiding these mistakes and investing in yourself. What you might not know is that it is more interesting to have fun in your latter years than when you are young.
Crispus is a finance professional with more than a decade experience in the industry. Over the years, Crispus has written in-depth articles on leading platforms like CCN, Marketwatch, and Seeking Alpha. He also runs a Forex education and managed account company called WestEndFx.