Managing your money can seem like a challenging concept for anyone so I like to keep the concepts simple at this point. Here are my top 5 tips:

1. Even if your daughter is not making a lot of money, or simply relies on an allowance, the first step is to help your daughter determine her income. Whatever the number is, this represents the baseline for all her saving and spending decisions.

2. The teenage years are a perfect time to learn how to develop and adhere to a budget. Have your daughter list out her expenses based on two key categories of saving and spending. Saving will include things like starting an education fund, saving for a new laptop or a vacation with friends, for example. Spending, on the other hand, includes those amounts spent on things like eating out, clothes, beauty, and entertainment. Help your daughter set realistic, achievable goals.

3. Now is the perfect time to help your daughter develop a tracking system for her expenses, whether it be saving receipts, jotting down her expenditures in a notebook ordeveloping an online tracking system. Help your daughter to regularly review her budget to see if, and where, she should cut back, if required. This is a Financial Tips for Your Daughter time when peer pressure can be difficult so talk to your daughter about the importance of saying no or having a backup plan in place is difficult. This might include not bringing extra money or her debit card, for example.

4. If she hasn’t done so already, have your daughter open one or more savings accounts to help her get into the habit of saving. Encourage her to put the money she receives as gifts into savings as well and review her account statements so she can see how her money grows over time. By prioritizing saving now, your daughter learns the value of discipline.

Even if your daughter is not making a lot of money, your teenage daughter has the distinct benefit of time and the ability to see how small, regular savings can grow over time. By learning these basics now, your daughter will be able to learn from her mistakes and develop habits that will enable her future financial security, while building confidence
and a nest egg at the same time.

1. At this point in her life, your daughter needs to start an emergency fund, which provides a financial cushion that can keep her afloat in a moment of need. Having an emergency fund is crucial since it can help your daughter avoid borrowing more if she has debt.

These funds might cover things like unexpected medical bills, a loss of job, or an automobile repair, for example. The amount your daughter should put aside varies but a fair rule of thumb is to have enough money to cover three to six months of living costs.

2. Teaching your daughter about the importance of investing is very important for her future, but it can also be confusing and time-consuming if she has a busy career. Automating her investment plan can make things much simpler and remove that overwhelming feeling.

A systematic investment plan, called a SIP, is one of the way to automate investing which may help mitigate the risk of timing the market. They can help you build up your portfolio in long run by letting you invest a small amount at period intervals like weekly, monthly or
quarterly. This money is then invested in the mutual fund of her choice, thus leaving the management of the money to a full-time professional.

3. Retirement planning is the single most important goal for every one of us. While it will likely seem like a long time away for your daughter just starting out her career, your daughter should start saving as soon as she starts working. It’s the process of preparing today so that she can achieve her goals and dreams for the future. She should be putting aside at least 10-15% of her gross salary, and don’t forget that there may be a plan at her workplace that she can also take advantage of.

4. As your daughter embarks on her career and a lifetime of financial management, now is a good time to start establishing a good credit history. At some point, most people will need the convenience of a credit card or will need to borrow for a larger purchase, like a car or a house.

Your daughter can do a few things today to prepare for when she might need credit in the future. These include ensuring she pays all bills and parking
tickets on time, for example.

It’s also a great time for your daughter to actively learn more, read books,
and ask for advice when she needs it. She will only get better at creating and achieving her financial goals.

Most people spend their twenties building a solid financial foundation for the future. At this
point, she has hopefully started an emergency fund, is saving for retirement, starting to invest and establishing a good credit history, among others.

Your daughter has likely become more comfortable with who she is in her twenties,
and with what her future priorities are. Now that she is older, and probably somewhat wiser, your daughter needs to continue to learn key money skills that can help her maintain control of her finances, avoid debt, save more, and
achieve the dreams of her future. This is the decade to keep building and protecting her wealth.

Some key areas of focus right now include:

1. Remind her that she is halfway to retirement so ensure she is maximizing both personal and retirement plans.

2. Ensure she is sticking to her budget and, ideally, not spending all her pay cheque. Her needs, wants and dreams have likely changed since her twenties, so encourage your daughter to revisit her budget and to adjust for life changes such as getting married, having children or buying a house.

3. She should continue to increase her emergency fund balance, if possible, to ensure that she has at least 6 month’s worth of living expenses.

4. Continue to pay herself first so she can better save and reach her future financial goals.

5. She should increase her insurance coverage to provide financial security for her partner, dependents and family. Additionally, as your daughter’s assets grow, she may need more insurance to cover them. Ideally, experts recommend at least 10 times her annual salary in coverage.

6. By now, your daughter may be married or in a long-term committed relationship. It’s so important that your daughter gets comfortable talking to her partner about money, income, expenses, financial goals and agreed upon timelines. Encourage her to establish a routine to openly and honestly discuss finances.

7. Now is the time for your daughter to diversify and take more calculated risks when investing. At this age, her asset allocation should be heavily weighted towards equities, and it’s important that she periodically rebalances her portfolio to ensure that she maintains her optimal asset allocation to achieve her financial goals.

8. Lastly, although your daughter may feel like she has many years before she needs to worry about writing her will, now is the time to do it. Wills aren’t just for old people! They are critical to life planning and financial well being and can also make life much easier for your daughter’s dependents and family in the event of an untimely passing.

An Investor education and Awareness initiative of Aditya Birla Sun Life Mutual Fund

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