Teach Your Teens Now!
As parents and grandparents, we have not done a great job preparing our offspring for the real world of money and responsibility. Consequently, they are not able to leave the nest and thrive. U.S News & World Report reported, “More than a fifth of millennials have yet to move out from under mom’s and dad’s roof—a dynamic that likely made Mother’s Day plans easy to coordinate but doesn’t bode particularly well for the economy at large.” The United States Census Bureau adds that “… 24 million 18- to 34-year-olds, lived in their parents’ home in 2015.”
Jonathan Vespa wrote The Changing Economics and Demographics of Young Adulthood: 1975-2016, based upon government Census Bureau statistics. In his report, Vespa talks about how my generation of Baby Boomers, “… were expected to have finished school, found a job, and set up their household during their 20s… Today’s young adults take longer to experience these milestones.” He goes on to say that our youth is not reaching these milestones, “Because these milestones are tied to young adults’ economic security …”
Teens: Money Matters
Teaching teens about anything is a challenge. I know the challenge because my son wrote a “parenting book” when he was a teen. (I obviously needed help. By the way, he got it published and then translated into Russian and German…don’t ask!)
The point is that these kids are about to leave the nest (we hope) and venture out into the real world where the cocoon of comfort may start to unravel when it comes to money matters.
Is it too late to create a financially functional home when your kids are teens? No. But, it is harder and messier. I liken it to potty-training. If you skipped that lesson until your kids were teens, indeed, it is harder and messier, but a necessary lesson just the same.
Why Is It Important To Teach Teens About Money?
It’s important to start the money lessons before our children leave the nest because they are already spenders. According to MediaPost, “Generation Z teens have $43 billion in spending power and influence an additional $600 billion of family spending. Kids now influence more than 70% of family food choices in general, and 80% to 90% of items bought for them.”
Where Do You Begin? The Conversation Starter
Start with coming clean with yourself regarding how much money you now hand out to your teens. What are you (and your partner) paying for now? Make a real list and put weekly outlays on it; lunches, snacks, clothes, entertainment, gas for the car, trips to the mall. You get the drill.
The next step is to ask your teen to fill in a list under the following statements:
- I spend the most money on…
- Most of my unplanned purchases are…
- I make most of my unplanned purchases when…
- I get the most satisfaction from buying…
Now discuss the list and begin the conversation about tracking expenses.
Neale’s No Magic Money Log
If you are really serious about planning a budget, teenagers and adults alike need to look at how they already spend before they decide how to budget. You and your teen can each keep a daily log of expenses for one month and then share and discuss your findings. You can use an old fashion 3x5 file card, snap a photo of every receipt or use a mobile budget calculator. The point is that at the end of the month, chances are that you and your teen didn’t realize where all the money was going!
The sample below shows an easy way to keep a log:
(Each purchase is listed separately, as soon as it is made.)
Day of the week: ________
Item Bought: $________
Need or Want: ________ (This will help you and your child to really think about the purchase and to later see what could be culled from the budget.)
After a month of this tracking, you will help your teen to really see how they are spending money; yours and theirs.
Needs Vs. Wants For Teens
Everybody wants something, and we all can confuse want and need at any age. Giving teens some control over their own expenses makes for a great reality check. You can make this a “game” when you are in a car, especially if there are younger kids in the family. I love car games because you have a captive audience. Young kids will like the challenge more than the teens. But begrudgingly, you may see your teens speak up, mostly to correct everyone else!
The purpose of the game is to start a conversation around needs and wants. If you see a store, throw their product out as an idea. After your kids get the hang of this, they can rotate among themselves to ask if something is a need or a want.
Here are some examples:
Which is it? Need or Want
- New Shoes – Need or Want? Let the kids think about the fact that they may need shoes, but do they need the latest Gucci leather low-top sneakers that cost $950?
- Cell Phone – Need or Want? We know where the kids will come down on this, but you, as a parent, may want your kids to have cell phones for safety reasons. Discuss whether it makes sense to have unlimited talk and text.
- Premium Cable Subscription – Need or Want? If they have electronic devices that can stream what they want, they may be able to substitute one “want” for a lower cost alternative.
You get the point. These initial conversations will open a lifetime of valuable lessons. Maybe someday you will be able to say that you are suffering from “Empty Nest Syndrome” knowing that your kids are financially independent.