If you’ve got a teen (or pre-teen) under your roof, you’ve likely noticed that besides a scarcity of food, what was once a sufficient allowance or financial life lesson for Junior (i.e. “do your chores, don’t spend it all at the candy shop”) probably isn’t quite enough anymore. In between imparting your life experience and expectations regarding their social life, school responsibilities and career planning you’ll want to ensure that your mini-me is equipped with the money know-how they’ll need in the coming years. Read on for some thoughts on how to get started:
Communicate, Communicate, Communicate: Yep, it’s so important we’ve got it tripled! Many parents aren’t comfortable with money themselves and as a result keep it off “the talk” radar. If the under-the-rug style is yours, try to move past it. For example, if you’ve got debts, demonstrate how you regularly budget for the payments. If there’s an aspect of money management you feel is a strong point for you, share your knowledge – don’t just assume it’ll be picked up along the way.
The ABCs of Banking: Make sure your teen knows the ins and outs of regular banking. Understanding the difference between chequing and savings, how to write a cheque (and avoiding bouncing it), and how credit works may seem like basic concepts to an adult who has been dealing with them for years. Teaching your kids early on can give them a real advantage in avoiding financial pitfalls once they’re off to college and riding solo.
A Budget of their Own: Sit down with your teen and help them come up with their very own budget. Discuss items they may have to purchase with their own money (whether it comes from an allowance or a part-time job) such as clothes, their cell phone and the latest trends. Review whether or not they’re saving up for post-secondary expenses. Reevaluate the budget together periodically to make adjustments where they’re warranted and set new savings goals. Since budgeting is a huge part of managing everyday finances, having one from the get-go can really help them make the grade!
While it may be tough to always get your point across with so much competing for your teen’s attention, just think how you’ll breathe a sigh of relief and deserve a pat on the back once they’ve successfully flown the coop and can effectively manage their own financial nest.