Best Financial PlanningPractices For Teenagers

What is Financial Planning ?

Financial Planning is an ongoing process to helpyou make sensible decisions about money thatcan help you achieve your goals in life.

Managing money as a teen can be challenging.

Teens also have a hard timesaving for the future. so

setting aside some of theirspending money for the future

can be hard.

Budgeting Money

You need to learn how to budget your money as soon as you bring homeyour first pay check.

Once you know your goals, think about what you need to do to get there and do some planning.

Don’t think, ‘My goal is to have fun.’ Think, ‘I’d like togo out for pizza with my friend next Saturday.’

Needs VS Wants

know what your needs are and whatyour wants are. Make a budget.

How much can you afford to spend?

Do you need everything now, or can you buysomething later?

where can you get the best deal for these items?

Consider All Costs

Before buying anything as a majorinvestment, first try and understand thetrue cost of ownership.

Learn About Expenses

‘This is how much my parents have a month – andthen they pay for the mortgage, Television, food (etc.) –and then this is what they have left over at the end.’

Making Money

Earning an allowance is nothing compared toearning your very own dollars as you will knowabout responsible money management.

Money is hard to earn andthey don’t grow on trees!

Entrepreneurial practice can help you getcomfortable with making and managing your cash.

Cutting Expenses

Everyone has expenses they can cut. Cafémochas at $3 each do add up. You can buy food at the

grocery store at cheaperprices, take time to pack anafter-school snack, takefewer trips to your favouritecoffee shop.

Wealth Foundation

________________________________________________

Wealth Protection

Teenage Financial Model

Wealth Accumulation

___________________________________

WealthAcceleration

___________________

Emergency Fund Should have 6 to 12 months worth of

expenses

Insurance plans

Education ( university ) Other expenses

Investments, stocks & shares

Wealth Foundation

• Find out how much you spend each month.

• Estimate how much you will spend in 6 to 12 months.

• Save up for that amount of money by putting some money into your bank accountevery month.

Wealth Protection

• Hospitalisation Plan – A health insurance plan providing coverage forhospital confinement due to illness, accidents, intensive care ofconvalescence.

• Critical illness plan – A Insurance product in which the insurer is contractedto typically make a lump sum cash payment if the policyholder is diagnosedwith one of the specific illnesses on a predetermined list as part of aninsurance policy.

Wealth Protection

• Personal accident plan – An annual policy which provides compensationin the event of injuries, disability or death caused solely by violent,accidental, external and visible events

• Whole life plan – A life insurance contract with level premiums that hasboth an insurance and an investment component. The insurancecomponent pays a stated amount upon death of the insured.

Wealth Accumulation

• AFTER having saved up 6 to 12 months worth of expenses, put moneyevery month into another bank account.

• This bank account will be for your university fees and other expenses such ascar repairs (if you have a car) ect.

• Endowment Plan – a life insurance contract designed to pay a lump sumafter a specific term or on death. They are often marketed to help you meetyour financial goal like paying for education, or to build up savings over afixed policy term.

Wealth Acceleration

• You can invest in stocks and shares to earn more money than in a savings bankaccount.

• Put only a small portion of your money each month (the bigger portion should beput in the savings bank account, refer to the previous slide) as it is risky and youmay lose instead of earn money.

• It is best to seek advice from an experienced adult.

Survey For Financial Planning

• 90% of teenagers asked have a part time job.

• 80% of teenagers asked put their money into their bank monthly.

• 50% of teenagers asked have insurance policies.

• 80% of teenagers asked have investments.

• 70% of teenagers asked think Financial Planning is for saving.

Conclusion

• Saving money is very important as it will help you reach your financial goalsand you will be able to get things you need and also buy some other extrathings that you want.

• Having insurance policies are also important because it can help protect youwhen something bad happens.

• Putting money into your bank can help to eliminate the temptation ofspending that money.