#1 Money Tip for Teens

You've got your own money now. How cool is that! So, what are you gonna do with it? Do you spend it all on that 6 CD changer stereo that is "off the chain," or on the newest, slimmest flip cell phone, so you can impress your friends?

Between the two, the stereo is the best investment. Why? Because a cell phone is a financial commitment; that means that you have to keep paying for it. The stereo is a done deal. It's paid for and you can use it over and over again without spending any more money.

You want to avoid financial commitments if you can. Once you are committed, like when you sign a contract for a cell phone plan, you have to keep paying a set amount of money every month.

So, what happens when you don't have any money next month (cause you spent it all on pizza for your friends, and a new CD)? You lose the cell phone service, and the money you spent to get the phone is wasted.

Well sure, you still have the phone but you can't call anyone with it, so what's the use? (Those games get boring after you've played them 300 times.)

So, the #1 tip for spending your money is to think of what you buy as an investment.

I know, I know, investment is a boring word. You're probably thinking that "investment" is some old-person word, and you aren't even listening, right? Well, that makes sense. But, bear with me.

Using the word "investment" in this sense just means that you expect what you buy to last for some period of time. You wouldn't buy a stereo or CD player and only expect it to last long enough to play one CD, or one song from the radio, would you? Of course not.

So, when you think of that 6 CD changer as an investment, you're just saying that you expect it to entertain you with music for years and years.

The good investments are the ones that you don't have to spend any more money on; they will work even if you don't spend one more penny on them.

An example of a good investment is that CD player you are thinking about buying. You might want to buy new CDs to listen to on the CD player, but you don't have to buy any more CDs for the CD player to work, right?

What about the cell phone? Will it work even if you don't spend any more money on it? Well the games will work, but you can't call anyone with it if you don't pay your bill month after month after month.

See what I mean? A cell phone is a bad investment, because it just keeps costing you money. And if you don't have the money one month, they turn off your service, and the phone is useless.

So, you decide. Do you want a good investment (something that lasts without spending more on it), or a bad investment (something that keeps holding its hand out for mo' money and mo' money and mo' money)?