We have looked at activities and techniques useful for teaching primary aged children healthy money habits, including: How to Teach Your Children How to Manage their Money and How to Teach the Middle School Child About Money. I would now like to turn my attention to teenagers when it comes to teaching children about money.
Financial Attitudes and Behaviours of Parents
There is no doubt in my mind that it is the financial attitudes and behaviours of their parents that will have the greatest impact on how our teenagers ultimately manage money. At this age our children become far more sensitive to discrepancies between what we are trying to teach them and what we actually do.
It is no good trying to teach our children how to save money if we spend our lives trying to “keep up with the Joneses”. While the lessons we are trying to teach may be important, our children will see no value in them if they do not see us living out the principles behind the lessons.
Because of peer pressure to look or act a certain way, children at this age will often resent a family’s lack of money or spending choices. As moneywise parents, our priorities should be different from the cultural norms, and this will be reflected in the way we spend money and save money. It is important that our children understand the principles behind our choices.
Activity: Literally Presenting The Family Budget
One activity that I believe every parent should take their teenager through is a literal presentation of the family budget. The household income for one pay period should be brought home in cash. On the dining room table, this cash should be divided up between the essential household expenses (eg tithe, rent/mortgage, utilities, groceries etc) so that the teenager becomes aware of how much living in our society costs and how much is left over. To really reinforce this message, a wish-list should be written at the same time to demonstrate that there will always be more to spend on than there is money available.
Mid-Teen: Involve In Family Budget
By mid-teens, it is a good idea to involve children in the family budget. A first step might be to give your child responsibility for their clothes allowance. Tell them how much they have each month, give them basic guidelines as to what this is to cover and then let them go to it! It is crucial at this point that you do not bail them out or top up their allowance should it all go on the latest Gucci jeans. If your child manages this step well, it is worth rewarding their endeavours with more responsibility. For instance, they may take an active role in planning for and organising the next family holiday.
The Biggest Failings of Many Parents: Saying “No”
One of the big failings of many parents is their inability to say ‘no’ to their children. Parents must allow their children to fail sometimes, to make poor decisions and deal with the consequences themselves. Too often parents jump in and bail their children out whenever things get tight, instead of allowing them to learn from their mistakes. These early mistakes are powerful lessons that will shape the way the child handles money in the future.