Talking about money can be difficult and awkward at the best of times. When you’re trying to have that conversation with a teenager things can get even more challenging. However, money awareness and management are some of the key skills that you can pass on to young people. Learning how to effectively handle cash in your teens can help you to avoid running into issues later in life. So, how do you make sure that your message is getting across?
1. Contexualise What You’re Teaching
Encouraging teenagers to save isn’t always that effective. The idea of putting money aside in a bank account at some point in the future is unlikely to seem that appealing to someone who would much rather spend it now. Instead, contextualize the idea of spending i.e. encourage them to set the goal of saving for the new iPhone or a holiday, clothes or computer games. This is a great way to teach both the value of saving and the idea of spending only when you have the money set aside.
2. Teach an Understanding of Where Cash Comes From
The best way to teach teenagers where the money comes from is not to hand it over as an allowance but to encourage them to go out and earn it themselves. Seasonal work and Saturday jobs are easy to fit around school and study and will provide enough income for kids to start setting their own savings goals. Plus, they’ll begin to appreciate what it feels like to be earning independently and spending what you earn.
3. Budgeting Is The Tough Nut To Crack
Even for most adults, talk of budgeting tends to make eyes glaze over and thoughts travel elsewhere. It’s not an interesting topic and so getting a teen to listen to you while you talk about it can be tough. The best way to get someone interested in budgeting is with practical examples.
Try explaining to your teen how budgeting helps to meet savings goals, the part it plays in facilitating the financial elements of everyday life, as well as what you can achieve with it. Good budgeting means not having to rely on credit cards and loans to make ends meet.
It means building up a good credit score that will make it easier to borrow for a major expenditure like a car, wedding or holiday of a lifetime without relying on no credit check loans. Experiment with handing over the household budget for a week so that your teenager can see how budgeting works and all the different elements that are involved.
4. Steer Clear of Scolding Or Frightening Language
Particularly if you’re discussing debt or overspending it can be easy to stray into using language designed to scare. We want our teenagers to be wary of too much debt or bad money habits but it’s important to remember that these are lessons they need to learn for themselves.
Instead of putting the fear of God into them, give them information and facts, as well as resources they can use to check those facts and to ask for help if they ever need it.
5. Practice What You Preach
It doesn’t matter how many times you tell a teenager that they should be budgeting or they should be in control of their debts, if you’re not doing this yourself then they won’t take you seriously. Lead from the front and set the example when it comes to money management – sometimes this kind of action means much more than words.