Saturday, October 22, 2016

Harness Your Teen's Irrationality To Build Your Family Savings

Teen Savings Jar

Behavioral finance informs us that rational thought doesn’t always govern personal finance decisions. Lots of money behaviors are purely emotional or even seemingly random.

For example, people who could save and know they should save, often just don’t.

That’s why a new crop of apps that save “behind your back” (like Digit) or save based on random emotional triggers (like Tip Yourself) are all the rage recently. The apps transfer money from your spending to your savings account using unscheduled or unconventional triggers.

In that same vein, I have a quirky idea for parents out there. With hormones raging and frontal lobes developing, your teenager is the perfect unpredictable, emotional trigger.

Every time your teen does something irrational, incomprehensible, or irresponsible, transfer a dollar to your savings. Build up your emergency fund, your vacation account, or your family fun money card. If your teen is like most, you’ll be swimming in extra savings in no time!

If you’re going to have to endure a teen’s perplexing behavior, you may as well put some extra money away while you’re suffering through it.


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