It’s time to talk about money with your tweens and teens

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They also see how their parents handle money, for better or worse.

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“I wish I had been taught how to pay bills, and the importance of paying them on time,” said Amiara Martin, a mother of three from Columbus, Ohio. “As parents, we not only miss our opportunity to be transparent about the bills that come into our home but show our kids how to pay those bills.”

other parents told me They wished their parents had taught them the basics of budgeting, savings and credit cards, and more advanced topics such as investing, mortgages, managing taxes, negotiating salaries and calculating retirement savings.


Why is there no talk of money? Shame is a common cause.

Monica Eaton, a certified financial education instructor and founder, said that shame or embarrassment about financial mistakes can keep parents from having positive money conversations with their children. Alcanbury Press, a media company focused on financial literacy for children.

Eaton encourages parents to forgive themselves for past mistakes, acknowledging that it can be hard if you are still living with the consequences of your past. “By making peace with past money mistakes, parents may be in a better position to guide their children toward positive financial behavior.”

No need to pay much attention to financial crisis, advised Beth Kobliner, author of “Make Your Kid a Money Genius (Even If You’re Not)”. She recommended being honest but concise. “There’s no need to go into any sobering details, but if, for example, credit card debt has kept you from achieving certain goals in your past, let them know.”
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You don’t have to go far to get started, because there are so many learnable moments around money everyday. And it’s better if the kids experiment and make mistakes with their little perks when the stakes are low. Here are five ways to make money with tweens and teens.

Identify needs versus wants

A cornerstone of negotiating money is identifying wants versus needs. Before you head to the store with your kids, Kobliner recommends clarifying what a need like milk is more than a necessity like chocolate milk.

“If your family situation allows, it’s okay to indulge in small wants once in a while, but needs always come first,” Kobliner said.

Be direct if your child begs for something like candy at the checkout counter. “Don’t lie and say you don’t have enough money to reverse the recession,” Kobliner said. Instead, she recommended a direct response like, “No, I don’t think we need to spend money on that anymore. We’re here for the basics today.”

Kobliner said the importance of building this foundation is supported by research. A 2011 Duke University The study found that children whose parents gave in at the checkout line were more likely to develop credit problems as adults.

Consider giving children agency in identifying needs versus wants. Lauren Shamoun, a Rockville, Maryland, mother of teens ages 13 and 16, said she insisted on balancing her family’s food-and-drink budget with her kids’ cash requests as they turned teens and Became more social with friends.

Schamaun’s solution was to increase his teen’s allowance, but stop giving him money to move out. “If they want to spend $12 on a smoothie bowl, and it doesn’t affect my budget anymore. I’ve seen them weigh the pros and cons of such expenses and manage their money well.” learn.”

Talk about big-picture goals

Talking about goals matters. “Lifestyle goals can affect the type of education and the way students work. Those choices will have major implications for their long-term earning potential,” Eaton said.

If college is one of those goals, Kobliner recommends that parents establish a dedicated savings plan for college and begin talking about college affordability during eighth grade. “Tell your child you’re saving money for college, ideally in a 529 (college fund),” she said. “Studies show that kids who know are more likely to leave — no matter how much their parents saved.”

avoid bribe

It is tempting for parents to use money as a carrot for children, and some children may suggest financial incentives based on what they hear from friends. One survey showed that half of parents pay their children for good grades, an approach Kobliner advised against implementing.

Research out of Harvard University Shows that these bribes don’t work because external motivation is not what will motivate them to work harder over the long haul. It requires intrinsic motivation, a sense of authentic accomplishment,” Kobliner said.

Teach kids about saving and investing

Conversations about what to do with the money, whether it is an allowance or earned in some way, are important. Parents need to teach kids to spend less than they earn, Eaton advised. “This is basic money management advice, and it’s important.”

This important lesson is also on the minds of parents of preschoolers. Milwaukee’s Liz Colin already plans to teach it to her 4-year-old. “I wish I had been taught how important it is to save early and often. Saving 10% off each paycheck would be something I teach my son when he grows up.”

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Kobliner recommends that parents help their children open a Roth IRA to withdraw part of their earnings. “This is a great opportunity to teach your teen about the magic of compound interest,” she said.

Mathematics speaks for itself. Kobliner shared this simple, powerful scenario to use in conversations with kids: By age 20, if you save $1,000 per year and stop at age 30, you’ll have more than $200,000 by retirement. Will be

Explain the basics of credit cards

Credit card negotiations are important, especially if your teen is going to college, so it’s a common hiring base. singn up.

“When I Went to College, I Signed Up for a Credit Card Because of a Free ‘Gift’ and I Didn’t Know What April Meaning,” said Emily Williams, a Malden, Massachusetts, mom of sons ages 4 and 9. “I couldn’t keep up with the monthly payments and put myself in a lot of debt!”
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Kobliner recommends explaining the concept of credit card interest to children with an example like this one: Running a $1,000 balance on a credit card but making only the minimum payment each month will take more than six years to pay off and It would cost about $600 in interest.

Kids eventually need to learn to manage their money. Keep the conversation age appropriate, focused and equitable.

a Tea. 2018 study from Rowe Price indicated that the tide was starting to turn, but Kobliner shared that polls from earlier years consistently showed that parents are more likely to talk about financial issues with their sons than with their daughters. , thereby making boys express more confidence about financial matters.

“Many parents believe their sons are smart about money. This is bullshit, and it should stop,” Kobliner said. “Especially when girls face difficulties getting paid at par with their male peers. Make sure all kids are equally prepared for a smart financial life.”

Christine Koh is a former music and brain scientist turned writer, podcaster and creative director. you can find his work here and on Instagram, Twitter and Facebook at @drchristinekoh.


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