Helping Teens Understand Money
Teaching Young People About Finances Will Give Them a Head Start
Sep 14, 2009
Many young people today are being groomed for college in the hopes that they will achieve dreams of becoming doctors, lawyers, teachers, and maybe even the President of the United States of America.
While big dreams combined with familial support is a combination that will help many young people today, it should be noted that many adults do not understand money either.
While money is not everything, it is very important to understand given that it is the current medium of exchange that is most commonly used today. So, teaching teens about finances should start easily. This can be done by allowing them to associate their own use with family bills.
Show Kids Energy and Grocery Bills
Young children are often aware of what it costs to go grocery shopping. After all, before they are old enough to stay home alone, they are in the shopping cart watching the total ring up. So, spelling out the monthly grocery bill should not embarrass anyone.
Other bills that can be laid out are the water, electric, gas, and gasoline bills/receipts.
While doing this, do not just let the numbers lay on the table for them to stare at. Children need guidance, and teens are not yet grown up.
With the grocery bills, remind them about dinners that are made throughout the week, and how much it costs to support a family. It might also be a good idea to add up just how much is spent on their favorite snacks.
When it comes to the utility bills, explain about how long showers and televisions being left on add to them. Point out that keeping a home cool or warm is like money constantly gathering in a jar that will go to the power company.
Visual metaphors and similes will work especially well.
Put Teens to Work
Although high school students have mounting pressure upon them to get good grades, practice hard, and join a number of clubs so that they can get into the best school, it would be a mistake not to let them work and earn their own money.
Some parents feel that high school is going to be their child's primary vocation until graduation. However, high school, like college, is not a job. It is a place for teenagers to train at the expense of their parents to learn basic scholastic and communication skills. In the real world, some adults cannot go to school, and many who do, do so while supporting a family. Remember those grocery bills?
While a teenager earns his own money, he can feel free to blow some of it without having to account for any of it. This is an experience that should be gotten out of the way before he has any real responsibilities.
Also, while working, teens will have to work on a schedule that is not always convenient for them. While they might not want to work Friday night, skipping out of it will be at the risk of being reprimanded or fired by someone who takes what they do very seriously, their boss. This is something else that is best to learn early.
Teens Should Start Saving Money Before They Need it
While adults know that they have to save for retirement, most young people do not think they do. When adults save a significant portion of their earnings over a lifetime, it can mean the difference between retiring in style and pulling night shifts at McDonald's.
When teens learn that more money means more options, whether they be in retirement, a car, restaurant, or shopping for someone's birthday, they might be inspired to save some of their earnings.
Do not just allow them to save blindly, though. Help them save toward a goal, such as a car or graduation trip.
When it comes to guiding teens, the best most parents can do is lead them based on their own experiences. A great way to explain savings to children is to map out just how much money the average person has made by age 65.
If a teen can see that the average income earners make $40,000 a year, and over 45 years will have had close to two million dollars pass through their hands (remember the visuals) they'll begin to realize that they too can have two million dollars pass through theirs.
The question is, how much of it do they want to keep?
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