Charly Baker's Sample Writing

Financial Tips for Teens: The KD situation

By: Charly Baker

So you want to buy that new pair of KDs with your credit card? Did you know that by the time you pay off that $199.99 dollar purchase, you could actually have spent much more to purchase those shoes because of interest?

Recent studies show that most teens in the US are not versed in basic financial literacy skills. “Financial literacy should be on a student’s list of priorities” and “Financial literacy: a problem among students” are both articles that discuss the ever present problem among today’s teens.  Here are some tips to help you navigate through some of the waters of financial literacy.

  • Don’t make purchases in haste. Most people tend to make purchases at the spur of the moment. If you want something, try waiting 24 hours before purchasing that item. If you still have the desire to purchase it after waiting, then go for it, but most of the time you’ll find that the desire has worn off.
  • Save, Save, Save. Teens these days have a hard time with the concept of saving money. Most students get a lump sum of cash and they want to spend it before it even has a chance to make it to their wallet. One of the most important financial lessons to learn early is how to save. Students that learn the importance of putting a small amount of money aside from each paycheck will start practicing the habit early on and help build a better financial future.
  • Avoid credit cards. Teenagers and young adults are the perfect target for credit card companies. Students often want the hottest new purchase and may not want to wait until they have all of the cash to purchase it… That’s where credit card companies come in. Students think ‘charging’ an item is a great deal because they can pay it back later, but they don’t realize they will be paying interest as well. Interest is a percentage of money credit card companies charge you on top of your original purchase. Those KDs we mentioned earlier would probably cost closer to $250-$300 depending on how long it took you to pay your bill down. Yes, you are getting the shoes that you want, but at what cost? Also, statistically, people with a credit card often make multiple purchases per month. Now, not only are you paying extra money on your KDs, but you’re paying interest on your new iPhone, that new purse you wanted, and your expensive dinner at The Cheesecake Factory.

Needless to say, it all adds up. Try by starting to practice these few simple steps. Some hints: place extra money in a jar to save up for a big purchase (maybe your new shoes) and then go and buy them outright. Number one, you’ll have the satisfaction of saving money and purchasing something that you’ve earned. Number two, you’ll sleep a little better each night knowing you don’t have any crazy credit card debt looming over you head. You can throw that extra money you’re saving into a savings account, or towards a new purchase.

If you can master some of these skills as a teen, you will be on your way to financial security and freedom! Don’t you want to be free to use your money as you please?


“Financial literacy should be on student’s list of priorities” - http://news.psu.edu/story/143172/2013/01/15/financial-literacy-should-be-students-list-priorities#nw5

"Financial literacy a problem among students” - http://www.collegian.psu.edu/archives/article_32d6b7b2-2828-548a-9725-81940ae33f3f.html