Sometimes (or most of the time) it might feel as though your teen is tuning you out. But you have more influence than you might realize, including the ability to help your teen learn about money.
Follow these tips to help your teen become a financially literate adult:
Help Your Teen Learn About Money By Being a Model of Careful Spending
Your teen learns the most about money based on how you spend it. Do you talk about your expenditures, or are you a bit "hush-hush" in this regard?
It's time to start being more vocal about your spending decisions with your child in order to help them learn about money. While shopping, talk about the prices of things: "I'm not going to get that, it's too expensive" or "That looks like a good deal." The more you can say these things aloud, the more your teen will internalize the idea of evaluating future purchases.
Additionally, be sure to evaluate whether the thing you're eyeing is a want or need, so your teen can think about things in the same way. Your child will learn impulse control as you model it yourself. You might say something like: "I really want to buy that, but it's just too much money" or "Maybe I will stop eating out at restaurants for the next month so I can afford those concert tickets."
Allow your teen to hear you prioritize your purchases, as you delegate money to specific purposes.
Consider Allowing Your Teen to See Some of the "Books"
Maybe your parents never showed you their income tax returns or bank account records. Household expenditures and income might have been a mystery when you were living with your parents. But you don't have to be similarly secretive about your finances.
You might not trust your teen to look at all of your financial documents. But you should at least try to give your child a look into your:
- Checking account - Don't give your teen your internet banking password, but while your bank records are pulled up on the screen, you might want to show your teen some of the most recent entries. For example, you can point out the starting total in your checking account that was reduced by monthly expenditures such as household bills, extracurricular-activity costs, and more. Your teen should get a sense that money is constantly flowing out of the account, and your demonstration should make your teen want to help to reduce your expenses.
- Savings account - If you have a savings account, you can show your teen the accumulation of money in the account, no matter how small. This will encourage the teen to save as you talk about your goals for this money (college savings fund, vacation, car, or similar.) You should also sign your teen up for their own savings account. Help your teen to make a goal to increase their savings by a certain date.
Ask Your Teen to Do Some of the Shopping - With A Goal
It's likely that your teen doesn't do the shopping for the household... but what if you set your teen out with the goal to try and conquer this task? It’s actually a great way to help your teen learn about money.
Give your teen a list of the household items that you need, and see if your teen can purchase all of these items under a certain monetary goal. Your teen can use the calculator in their phone or bring along a pocket-sized calculator to help estimate the final costs. Make sure to remind your teen to add in the additional percentage at the end, to include any applicable sales tax.
Consider Whether an Allowance is Teaching Your Teen Anything
Allowances are usually great ways to help your teen learn about money. But does your teen get an "allowance" just for being your child? Or does your teen have to do something specific to earn that allowance?
You might want to consider tying at least some of the money that you give your child to an incentive... doing something to "earn" that money. If you freely give too much money to your child, this will create the perception that money is endless.
Remember that you are your best model for your teen to learn about money and become financially literate.