Dollars and Sense for Teens

If you have first job you are about to embark into a world of financial freedom! No longer will you have to rely on your parents when you want money to go out, purchase concert tickets, or buy new shoes.

Having a job and earning money is great. Yet with financial freedom also comes a lot of responsibility. Are you planning to go to college? Start saving now. Do you want to buy a car? If so, you need to keep your credit clear. Before you start spending the money you are making, learn a little more about how to handle it well.

Credit Cards

A credit card can be a good tool to have, but it can also be dangerous. Some kids get credit cards to use in emergencies, such as if their car breaks down far from home. This can be helpful, but you need to learn how expensive credit cards are if you use them for everyday purchases. These resources will spell out the high cost of credit card use:

• The True Cost of Credit Card Debt – Outlines how much a large purchase will cost by the time it is paid off.
• How Much Credit Cards Cost – Shows how expensive a small purchase is when using the credit card.
• If you have a credit card, use it sparingly. Keep in mind, however, that you can, and probably should, use one to start building your credit score. If you are going to have a credit card, make sure you use it wisely.

Car Buying

When the time comes to buy your first car, use some common sense. It might be fun to drive the hottest new sports car, but you need a vehicle you can use to drive to and from college or work, which means you need something that gets good gas mileage. You also do not want to spend your entire paycheck on your car payment. Save some money first, and either pay cash or put a tremendous down payment on your first car. Avoid buying a brand new car, because it loses value the moment you drive it off the lot. For more information about buying a car, visit these resources:

• Car Buying Tips for Teens – Tips for teenagers and other young first-time car buyers.
• How Much Car Can You Afford – Tips on deciding how much to spend on your first car.
• 10 Steps to Finding the Right Car for You – Guide from Edmunds for first-time car buyers.
• Used Car Buying Tips for Teens – Help for finding a good used car.

Scams

You have money and other people want it. You have to be careful with your money so that you are not scammed out of it. There are several common online scams to watch for, so do your homework before you spend money online. Start with these resources:

• Scambusters – A good site to search if you think you are looking at a scam.
• Snopes – A site that you can use to find out if something you read online is true.
• Common Online Scams – A guide from Surfing the Net with Kids.
• Overview of Common Internet scams – A guide from Hoax-Slayer.

Internet Security

Identity thieves are experts at finding information you post online. Never give out your bank account, credit card, or Social Security numbers in an online format unless you are sure it is secure. Learn all you can about Internet security by visiting these sites:

• Stay Safe Online – Resources for helping teens stay safe online, both with their personal and financial information.
• Internet Security Overview – A technical guide to keeping your computer secure.
• Avoiding Identity Theft – Guide from the FTC.
• Avoiding Online Identity Theft – An identity theft guide specifically for Internet users.

Basic Budgeting

Spending money is easy, and many people spend more than they have from the moment they start making money. To avoid falling into the debt trap, learn how to budget now with your first job. A simple budget compares your expense to your income and makes a plan to pay them off. Be sure to plan for free spending money and savings. Check out these resources to help you make a budget:

• All About Personal Budgets – Everything you want to know about budgeting.
• Putting Your Student on a Budget – A guide about budgeting geared towards teens and parents of teens.
• Budgeting Methods for a Teen's Budget – Useful guide about budgeting that has usable tips.
• Teens on a Budget – Short article that contains budgeting tips.

By using your money carefully and avoiding the debt trap, you can start saving now for a large purchase or your college expenses. Even as a young adult or teenager, you can, and should, start making good choices with your money.