Money Lessons for Your Teen
In the midst of a sluggish economy, most families are experiencing some financial strain, and, although they may not be privy to all of the issues, children also feel the strain. As it did with the generations of the Great Depression and past deep recessions, this period offers great lessons that can be passed on to the next generation. Now would be the best opportunity to have the financial talk with your teens.
Although many teens look at family “belt tightening” in terms of its effect on their own needs, this is a good time to circle the wagons around the family, and get your teens on board. By making them a partner in your family’s financial matters, and increasing their financial literacy, they will be more likely to accept responsibility and accountability which are typically the biggest obstacles teens have to overcome.
This is a good time to have everyone in the family establish their own goals and then work together as a team to prioritize and budget. If everyone can work towards a goal, with some sort of reward at the end, there will be greater participation in the responsibilities of managing the budget.
The children of the Great Depression era became great savers. The same lessons learned then, can resonate with today’s children. Establish savings accounts and savings goals with your teens, and have them review their savings progress at a family budget meeting. You can encourage their savings habits by providing a matching contribution of some sort. Show them how the “miracle” of compounding interest can eventually make them a millionaire. Most teens will like that idea.