Teach your kids about money, budgeting, and saving during their tween and teen years to help them make smart financial decisions and understand the value of work.
“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people that they don’t like.” Will Rogers
Key Concepts:
- The tween and teen years are PRIME opportunities to talk about money. Even if you resisted earlier discussions around financial literacy, now is THE TIME to take this seriously. It is hard to learn the skills you need to manage money without some practice.
- As your children are more independent, making more financial decisions on their own in the real-world, and legally able to work (if not already, soon) the chance to teach, learn, and understand is now.
- Peer pressure and advertising are impacting your child’s spending and saving in new and powerful ways.
- Any job helps your children to understand the value of working, earning, and the value of money. BUT, finding the right balance between school, extracurricular activities, and a job can be tricky. Research shows that part-time jobs are correlated with academic success when they don’t exceed 15 hrs. Other children can consider volunteering, summer jobs, or household work.
What To Do:
- Consider changing to a monthly allowance. This will allow for more planning and budgeting practice. Go through your child’s monthly expenses and find an amount that feels reasonable.
- Allowing kids 12+ to create their own budget is an excellent way to build skills around independence. Use a financial app to develop a budget and create categories for spending.
- Try not to bailout your children if they run out of money. Instead, consider it a loan and make a plan for repayment over the next few months. If your child struggles, back up one step and help scaffold the process.
- Talk about spending and saving as central to your values. What is important to you to spend money on? Education? Vacations? Your home? There is no right or wrong answer, but helping your child to learn what you value can help them understand what you do and don’t spend money on.
- Talk about VALUE. Compare quality, pricing and do tests at home. Buy discount shampoo and designer and see what works better. Try cheap paper towels and fancy ones and compare.
- Have a seasonal yard sale. Let your children set prices and manage money. Have them do market analysis on items, negotiate and make change.
- Introduce investing. Let your child pick a few stocks of brands they care about and learn to track values on a daily or weekly basis. Help them understand how to make good decisions and about calculated risks.