How to Talk to Your Teen About Money

It's time for adults to break the silence about how to use money and to expose the elements that have made money such a mystery for teens and young adults. One of the most important conversations you can have with your young person is to talk about money: How to get it, how to save it, and how to use it to make more money. The conversations can then be ongoing depending on the age and interest level of your teen. For every teen, regardless of interest level, the basics of personal finance are critically important.

Instructions

Difficulty: Moderately Easy

1. Talk to your teen about money, prices, taxes, inflation, saving,and investment. Even teens who already have jobs and bank accounts need to know more. Teens who use debit or credit cards definitely need to understand how banks charge fees for this convenience and that it is important to minimize fees and charges.
2. Talk to your teen about money, prices, taxes, inflation, saving,and investment. Even teens who already have jobs and bank accounts need to know more. Teens who use debit or credit cards definitely need to understand how banks charge fees for this convenience and that it is important to minimize fees and charges.
3. t a minimum, try to change some of your own habits if they conflict with what you would like for your teen. Your actions speak louder than your words, so be advised that you may need to take your own advice. Take a look at your own spending habits. Do you put money in a savings account,IRA, mutual fund, etc. If you do, talk to your teen about your savings plan.
   
   Beware of the messages you send by indiscriminate use of credit cards and impulse purchases. Talk to your teen about money, but make sure you are not sending a stronger message via your own money behavior.

Tips & Warnings

• Here are some topics you can talk to your teen about regarding money:
• 1)His or her own current use of money- Depending on their own spending habits and the additional privileges you have already extended to them, direct your conversation to what they need to know now.
• 2)Ways to spend a little less over the course of the week- Talk about the variation on gas prices and how fast food and convenience store purchases can add up quickly. Get your teen to come up with a strategy for cutting back on such expenses.
• 3) Savings accounts and other ways to "grow" money - The interest rates on traditional savings accounts at banks may seem tiny, but still you can talk to your teen about putting money aside for a later time. Perhaps your teen has a big purchase in mind and you can apply your talking about savings to the purchase down the road. If you invest money in the stock market or other investment strategy, share some of that information with your teen. It may spark an interest with your teen and at least raise his or her awareness of the financial side of the world around us.
• 4)Reading and Understanding bank and credit card statements- Older teens,as well as some younger teens can start to understand the sections of financial statements and how those fees and charges impact your family and your teen.
• 5) Money management is part of running the household- Talk to your teen about how money management is part of family life, rather than a source of stress and heated argument, then they are more likely to respect the honesty of conversations about money.
• 6) Actions today can either limit or enlarge choices for the future- Talk openly with your teen about interest, especially compounding interest, can become a prison if the interest accumulates on credit cards and it can open up opportunities if the interest is on a savings account, savings bond, or investment account.
• 7) Money management is about everyday decisions - When kids see their parents consciously saving money at the grocery story with comparative shopping, planned purchases, and selecting sale items, the see that these decisions can mean more money in their family till.
• 8) Conserve energy and reduce utility expenses - Talk to your teen about electricity or water use. Instead of yelling at your teen for not turning off lights and electronic devices, show them how to read the electric bill. Similarly, instead of just hollering about those long, long showers, show your teen how the water bill is calculated. Those long showers impact the electric bill (or other source of heating the water) as well as the gallons of water.
• 10) Planning for larger purchases- Appliances and vehicle break down. As much as possible, try to talk to your teen about putting money aside for unexpected purchases such as repairing or replacing an appliance or vehicle.
• Talk to your teen about money. These conversations will have to take place over time. It may be a challenge to find the time to initiate a conversation on one of these topics. Avoid launching into a lecture when you are stressed about money such as that day's arrival of the car insurance bill.
• Your good example is the best conversation opener. Talk to your teen. Just because your own parent(s) may not have talked to you about money is no reason to continue the pattern. Break the silence and expose the mystery surrounding that all important topic: money.