Being self-confident, independent and savvy when it comes to managing money is a challenge for many adults. Younger generations — even tweens and teens — can offer a fresh perspective that can help us master our financial lives.
Gen Zers — those born between 1995 and 2009 — have seen a lot over the past decade. They've watched their parents grapple with the aftermath of the financial crisis, many living paycheck-to-paycheck with meager savings and crippling student loan debt.
No wonder some of our youngest savers and investors are a little anxious and more cautious, yet they are also pragmatic. Many already understand — and others soon will — what it takes to secure your financial future.
The key is to invest in yourself.
Here are four strategies to begin to do just that:
Understand your worth
Growing up with smartphones, tablets, laptops and an array of innovative technologies, there are many opportunities for young people to earn money. But first you have to know your worth.
What are your likes and dislikes, strengths and weaknesses? What are your interests, your hobbies? How do you feel when you are doing what you enjoy? And when you are not?
Embrace your passion and your talents so that you can pursue what you really want to do in school or work.
Increase what you own
Your greatest financial asset is often your earnings. Many tweens and teens are already making money and banking their pay. A recent survey found 77 percent of 14- to 22-year-olds freelance, work part-time or earn an allowance. More than a third of them plan to work in college.
Two-thirds have their own bank account or a joint account with their parents, according to another recent report.
The strategy now should be to increase that stash with each job and paycheck. Don't spend every penny. Start out saving as much as you can and set a goal to increase that amount by a certain percentage every time you get paid or earn an allowance.
Limit what you owe
Distinguishing between "needs and wants" is the foundation of financial education and a critical life skill.
Children may appreciate that clothes, food and housing are essential, but as they grow older some teens have more trouble grasping the fact that having the latest iPhone is not a necessary expense.
Limiting what you spend on discretionary items — or what you ask your parents to spend their money on — can help you cap what you may owe in the future.
Having an ongoing conversation with parents about household costs and how much it takes to cover them can make it much easier for young people to create a "spending plan" and prioritize expenses as they enter adulthood.
Learning to live within that plan or "budget" will help you avoid having to overextend yourself and borrow money to get what you want.
Learn to be resilient
You're doing what you love to do, you're earning money, putting away some savings and not borrowing too much. So you should be all set, right?
Well, maybe, until a curveball strikes. What if you get thrown off track? What do you do? You have to learn to be resilient.
You need a backup plan for your finances. Having sufficient savings can help you afford an unexpected expense. But to recover and rebuild after an emergency — an accident, death in the family, job loss — takes a much greater investment.
You have to be self-confident as well as savvy. Go through the steps again. Figure out what you want to do now. Your passion and purpose may have changed, but you can still find your worth. Then follow the steps to increase what you own and limit what you owe. You'll bounce back.
You already know what it really takes. You need to "Invest in YOU!"
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.
