TEENS & TWEENS
WORDS BY REBECCA HILL
Your Teen and Money The day that Carol Savitsky asked her sons to buy a gallon of milk at a grocery store in their hometown of Zionsville was their first lesson about money. The boys had to find the milk, take it to the cashier, hand over the money, wait for the change — all while Savitsky waited in the wings. Though it was a small lesson, it led to others, each building upon the last experience.
Sanson says that teens need examples on how to make sound financial decisions. Parents should walk their kids through the process and give them chances to practice.
Little did her sons know that these grocery store trips were practice for real-life money handling, and they had their mom to thank for teaching them this essential lesson. Savitsky’s boys are now grown and teaching their own kids about money.
Finally, Sanson believes that kids need opportunities to make their own financial decisions. “Making decisions, even with small amounts of money, will give them practice toward smart money management decisions,” Sanson says.
According to Ashely LeBaron, co-author of a 2018 study by the University of Arizona, parents play an irreplaceable role in their children’s financial education. For most kids, their spending attitudes, knowledge and behaviors about money start with their parents. Parents teach their kids about money when they model skills such as working hard, managing money and spending wisely.
On top of this advice, Sanson also believes that kids should learn to live within their means. Parents can model this by not purchasing something that they cannot afford, and by saving for the future.
Jeffrey Sanson, executive director of the Indiana Council for Economic Education at Purdue University, agrees. He believes that teaching kids about finances is more than just a single conversation. It’s an ongoing process for parents and teens. “Parents should provide their kids with financial experiences that are meaningful and relevant to their lives,” Sanson says. But how can parents do this?
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Parents should also let their kids watch how household financial decisions are made, and show their kids their own money management decisions. Sanson suggests creating a specific family savings goal, and discuss how to allocate each paycheck towards that goal.
Lastly, you must pay yourself first, Sanson says, by quelling the urge for instant gratification. This will help your teen learn the value of saving over mindless spending. For graduating teens who are looking to get a job or go to college, this is especially critical.
The discussions that you have with your teen now will help set them up for a better financial future when they’re adults. With hands-on practice and open communication, you’re preparing them for a good financial start.