5 Simple Tips for Talking to Teens About Finances

Thinking back to when I was in high school, I can recall police officers visiting to discuss drug abuse resistance. And I remember having to get permission slips signed to attend the classes that taught sex education. But I don’t believe there was ever a course presented that taught personal finance. Now, in my opinion, I think that learning how to effectively manage your money is just as important as resisting drugs and addressing sex maturely and responsibly.

Fortunately for me, I had a mom who made it a point to teach me how to pay bills and balance a checkbook. She also taught me to always have “she” money (money put away that I can easily get to if ever in a bind). And my dad would talk to me about the advantages of being an entrepreneur and saving money. But I realize not everyone was raised in a home in which talking about money matters was the norm. Consequently, this may make it difficult for some to address this topic with their own teenager.

If money talks are not currently part of your routine, no worries. With a bit of intentionality and practice, you will soon find yourself having regular, meaningful dialogues regarding personal finance.

Here are five ways to jumpstart conversations with your teen:

1. Talk to them about the methods you use to manage your household finances. Also, invite them to join you while doing your monthly budgeting and paying bills. This is an excellent opportunity to discuss what’s all involved with keeping things up and running each month. In addition to being a teaching moment, providing this insight may lead to greater appreciation from your teen.
2. Explain the consequences of making poor financial decisions. Make them aware of the penalties associated with late payments and non-payments. You may consider incorporating a discussion about late fees, canceling of services, credit reports, and credit scores.
3. Emphasize the importance of paying themselves first. Mention how quickly money seems to vanish when saving and investing isn’t prioritized. This could also lead to the opportunity to talk about ways to save (using bank/credit union savings account, high yield savings account, certificate of deposit (CDs), etc.) and various investment vehicles (tax-deferred retirement accounts, Roth IRA, health savings account (HSA), etc.)
4. Notify them when there is an unexpected financial occurrence. It’s impossible to cover all the situations that could happen. But when circumstances arrive that are out of the ordinary, communicate it to your teen. In doing so, they may pick up on some valuable lessons that have a lasting impact. For example, a medical provider erroneously sent my account to collections. I never received a bill or any type of notification from them. But I did get a letter from the collection agency. After making several phone calls and sending multiple emails, it was discovered that I didn’t get a bill due to a switch with the medical provider’s operating system. Long story short, we got everything straightened out, and this did not show up on my credit report. By sharing this experience with my children when it happened, there were several lessons learned, including the importance of:
   • opening and responding to mail in a prompt manner
   • regularly checking your credit report because mistakes can happen
   • reaching out and asking questions when you don’t understand something
5. Share your mistakes. I know this may be hard, but it is worth it. Dealing with personal finance goes beyond just adding and subtracting numbers. It also involves behavioral and emotional components that are deeply rooted within, some stemming from our own upbringing. Having open and transparent conversations allows your teen the opportunity to learn from your mistakes. And hopefully, this will prevent them from making the same mistakes.

In addition to these five tips, purchase a copy of Mini Money Lessons For Teens: The Little Guide That Sparks Big Discussions. This book will help you incorporate regular discussions about finances in no time!

Topics covered include:

* budgeting
* saving
* investing
* debt management
* smart spending
* goal setting

Also, to enhance understanding and influence engagement, each chapter contains:

• self-reflective questions
• action items
• topics for discussion

Mini Money Lessons for Teens: The Little Guide That Sparks Big Discussions is written in simple, easy to understand terms. It provides insight from both a mom’s perspective and the viewpoint of her sixteen-year-old daughter. It’s formatted for teens to read and gain the basics of wise money management. And to encourage them to engage in conversation about finances with their parents, teacher, or mentor.

While it is a blessing to have children, parenting is complicated. And as parents, it is our duty to raise our children to be responsible adults. And managing personal finance is a huge part of being an adult.

So, let’s make financial literacy a priority. We owe it to our children and generations to come!