Teaching Money to Children and Teens

By ERIN TURNER

As parents, we have control over our kids’ spending when they are young. But once they get older and begin spending more time away from us, we have less and less control. I am banking on the hope that my husband and I have served as good role models when teaching money to our children, who will soon be teens.

Through the years, we’ve tried to lay a solid foundation and a respect for money in our kids so when they are faced with a financial decision on their own, they’ll know the right thing to do. In all reality, I also know there will be some unwise decisions made especially when the kids are surrounded by peers.

My oldest child will not be  teenager until next year at this time, but I know we will go kickin’ and screamin’ into the world of adolescence. Meanwhile, I’ve been doing some preparation and reading in order to know how to handle money with a teenager.

I came across this interesting article where Braun Research conducted 500 interviews with parents, as well as their 13- to 18-year-olds, throughout the U.S. Here are theresults:

• Over 80% of parents said they wanted to be better role models for their teens regarding money management.

• That same group said they have made money mistakes they would want their teens to avoid.

• 53% of parents reported that their teen asks them for money at least once a week.

• However, 35% of teen respondents said that when they did ask for money, their parents rarely or never used these occasions to discuss topics such as budgeting and planning for the future.

• 29% of parents of teens surveyed said they argue with their teen about money at least every month.

• 53% of teen respondents said they want to learn more about topics like budgeting, saving, and credit.

• Over half of teens reported that their parents are their primary resource for learning about money management.

Source: Banktech.com

I found it sobering that over half the teens looked to their parents as their primary financial educators, while 80% of the parents felt they needed to be better financial role models for their teens. That means  if we, as parents, are preaching “save, save, save,” then we had better be practicing it because teens learn more by example than by what is told to them. It’s the old adage: “Actions speak louder than words.”

If you have small children, start teaching them now about the value of money and how to save it. By the time they enter their teen years, you will have an easier time if they understand some of the basic principles of money management. But the education doesn’t stop there, as they enter their adolescence, it’s important for parents to step up the education and apply it to daily life.

So what do we want to teach our teens? I came across this article called, “Raising a Teen Who Spends Less” and it highlights the 10 things a money-savvy teen should know:

1. How to balance acheckbook.

2. Budgeting money.

3. Figuring future student loan payments.

4. How to establish good credit down the road.

5. Identifying wants vs. needs.

6. Dealing with debt.

7. Paying taxes.

8. How to consider all the costs associated with a purchase.

9. Saving for the future.

10. Stretching a dollar.

Source: Bankrate.com

So after going through the above list, how much do your pre-teens and teens know? How much more do you need to teach before they are off on their own completely? Learning these principles is a life-long lesson. Strong money management skills will help your children throughout their entire lives. Good money management is important for healthy marriages and a healthier outlook on life. Now, that’s a good investment for parents to make!

There are plenty of different tools out there to help parents teach their kids about finances. I just recently read about the “BillMyParents Smart Spending Card.”  Actually, reading about it is what triggered this week’s blog topic. Here is the overview of what the card is all about:

The “BillMyParents Spend Smart Card” can help parents take a more active role in helping their teens develop better spending habits with these features:

• Parents can build trust by giving their teen some financial freedom

• Instant text alerts with each use so parents can keep tabs when it counts

 • After a purchase, teens get a text showing their remaining balance to help them learn to budget better

• Safe and secure to use—even online—and can be locked or unlocked at any time

• Funds can be loaded with a single click (even by parent-approved family and friends)

My jury is still out about the effectiveness of this card. I question whether having parents so aware of every purchase and the ability to lock the card to any future spending teaches financial responsibility for the teen. In my view, it sends the message to the teen that they are being watched and if they screw up, someone is there to protect them from screwing up even more.

Sometimes, I think it’s better for the kids to learn the hard way about spending more than they have. In the end, I think they learn the lesson better. But I like the idea of teens being alerted to their balance for this card. This hopefully would help them stay within their means. Plus, having a card in their wallet tends to be safer than cash in their pockets, cars, or lockers. So, the card has some positive features. But I’m not sure I’ll be running out to get my kids this card anytime soon. However, at this point, I still have the majority of control over their spending. I may feel differently about this card in a few years!

What do you think about this card? Do you think it teaches ultimate responsibility or does it precipitate a dependence which eventually leads to an inability to manage funds? What ways have you taught your kids about spending and saving? Are there any tools out there that you have found helpful?

Teaching money to children and teens can be challenging — we’d love to hear your tips!

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Enjoy this blog? You might also like Erin’s previous posts on Cyber Couponing,  Reasons for Couponing,  Save by Stockpiling Food and Household Items, Coupon Clipping Tips and Techniques, or Decorating for Fall on a Frugal Budget. AND, be sure to check out the “Missoula Save it Club” on the MakeItMissoula homepage (see the Daily Missoula Fix buttons in the left navigation bar) for savings updates throughout the week!

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Erin Eisenman-Turner is proud to be a native Missoulian. Along with her husband and three sons, they raise chickens, pigs, rabbits, and vegetables at Turner Family Farms in the Orchard Homes area. When the farm chores are done, the coupons clipped, and the blog written, you can find Erin exploring Montana, collecting antiques, and trying to maintain a well-run, happy, and organized home for her family.