Whether you’re a parent or not, the kids are our future. We need to be setting an example for them when it comes to money. Setting good habits now will help them avoid financial problems and pitfalls down the road. In this article, I’ll show you how to teach your teens about money in a way that’s effective, fun, and age-appropriate.
1. Lead by example.
One of the best ways you can help your teen understand money is by being honest about your own financial situation. If you’re struggling financially, teens will be more likely to follow your example than if they see that you are working hard and making ends meet.
Teens need to see that their parents are working hard—and not just in order for them to pay bills or buy things for themselves and their families. They also need to know how much time and energy goes into keeping up with the bills. This can be very difficult for some parents who have been handed multiple credit card debts by their exes or former partners over several years of dating (or even getting married).
If they don’t believe in this concept at first (and sometimes even after hearing from parents). Then it could lead them down a path where they become more self-centred instead of helping others around them succeed financially as well
2. Start early.
It’s important to start teaching your teens about money early. If you wait until they’re old enough to understand what you have taught them, it may be too late. The best way to teach them about money is when they are young and impressionable—so, teach them early!
When should I start teaching my teen about money? As soon as possible!
3. Discuss money at the dinner table.
- Use dinner time to talk about money.
- Make sure you’re not too busy to talk about it.
- Make sure you have a comfortable environment.
4. Don’t be afraid to make mistakes.
When you’re teaching your kids about money and how it works, sometimes you’ll mess up. That’s okay! They’ll see that you made a mistake and ask for help when they need it. In fact, if there is anything that has helped me learn about finances in the past decade-plus of teaching my children about money. It’s the fact that I have made so many mistakes over time. And even still do from time to time (and am learning from those mistakes too).
5. Show them exactly where you’re taking your money from, and put it right back.
One of the most important things you can do for your teens, is show them exactly where their money goes. That means showing them how to track their spending and budgeting. As well as making sure they understand what a credit card looks like and how it works.
Show them that money comes from two places, work (if you have a job) or income (if not). If they’re getting paid regularly, it’s important that they understand which bills are being paid with this money. And which bills will be covered by savings before anything else happens—including buying new clothes or going on vacation.
6. Encourage them to get a job.
Teens need to earn money for themselves and for the future. They should have a job, even if it’s just babysitting or mowing lawns. This can help them learn responsibility and be more self-reliant. Which will lead them down the right path later in life.
There are many options available for teens looking for work beyond their parents’ homes. Babysitting, tutoring, summer camp jobs (which might also help them meet other teens), and more! Be sure that whatever you decide on allows flexibility as well as good pay. So that they can afford food while they’re working (and maybe even buy some new clothes). Also, make sure there are no legal questions involved with this type of employment. It’s important not just because it’s legal but also because teens may not know how much time off school would entail during this transitional period into adulthood!
7. Teach ’em to budget.
The first step to teaching your teen about money is to teach them how to budget. You can do this in two ways: by setting up a budget with them. Or by having them create their own as part of an assignment. In either case, it’s important that you show them how much they’re spending. And where their money goes so they know what they need and want. Then, once they understand what’s going on around them (and maybe even why), give them some tools for tracking their expenses. So that when those bills come due at the end of each month or quarter—or even year. You have proof of just how much was spent during those times spent together talking about finances over dinner or breakfast at McDonald’s (because let’s face it: if there are one place fans of The Office will never stop going).
8. Know the difference between needs and wants.
The first step to teaching your teens about money is to teach them the difference between needs and wants. Needs are things that you need in order to survive, like food and shelter. Wants are things that you want but don’t necessarily need—like an expensive smartphone or a trip to Hawaii.
Teach your kids how much money they should save for future needs (like college tuition). And how much money they should save for their wants (like sushi). Start by having them put aside some of what they earn each week into savings accounts. Or piggybacking onto their current bank account. Then encourage them to spend some of their allowances on fun activities every month. So that it’s less tempting not only from eating at home. But also from buying clothes or electronics instead of saving up for something bigger, like buying an apartment building down payment!
9. Plant good saving habits early on.
You can start saving for your kids as soon as you get them, even before they are born. Here are some tips on how to teach your teens about money:
- Start young. Teach your child the importance of saving early and often, so that they’ll be able to put away a little bit every month or week throughout their lives.
- Keep them informed about how much money they’re saving and show where it’s going—and why it’s going there! Make sure they know what kind of investments (stocks versus bonds) are best suited for their age group and what kinds aren’t appropriate for all ages. Show them examples of different savings accounts available at local banks. Explain why certain things cost more than others do when purchasing something like clothes or toys. Discuss retirement plans with them so that by adulthood each person knows exactly what steps need to be taken next towards achieving financial freedom (or whatever goal may exist).
- Discuss emergency funds—what constitutes an emergency? How much does one need per month? What happens if one doesn’t have enough saved up yet but would still like access via checking account withdrawal privileges without having large amounts stored away elsewhere?
10. Don’t sugarcoat or exaggerate when it comes to talking about money problems.
If you’re having trouble with your finances, don’t lie to your kids about how much money you have. They need to know that if they ask for something, there may not be enough in the bank account for them to get what they want at this time. The same goes for adults—if we can help someone else with their problems, why shouldn’t we?
11. Teens need to learn about money sooner rather than later, so teach them!
The sooner you can teach your teens about money, the better. If they are young and impressionable, they will remember it. And hopefully, use it when they are old enough to make decisions about money. They may even pass on these lessons to their children!
It’s not just important that your child learns about money. It’s essential that you keep him or her in mind as well. You should take an active role in teaching them about finances from an early age. For example:
- Teach them how much money needs to be saved for college (and maybe tell them what colleges offer).
- Show them how much debt would be incurred if a particular amount of money was spent today instead of invested today (this could also include a graph).
By teaching your teens about money, you’ll be able to help them grow up into responsible adults. They’ll know how to make smart financial decisions that benefit themselves. And their families – and they’ll also have a great head start on being fiscally literate.