If you have ever tried to share the wisdom of your experience with a teen, you will have heard the deep sighs and seen the eye rolling that this can trigger. Parents of adolescents know that they are on very dodgy ground when they try to change a conversation into a life lesson and that this is very likely to result in their teen switching off and leaving the room.
None of us expects our kids to be financial geniuses but we do need them to have some basic financial awareness before they start to manage their own money. This article explains how financial literacy is an essential life skill for young people but is one that, unfortunately, many of them are missing.
You can put as many money saving practices into place, as you like, if your teen is pulling in the opposite direction, the family finances will suffer in the end. Here is some basic financial wisdom that you may want to weave into your conversations with your teens to help them out as they get older.
Teach them how to manage on a limited budget
Unless they join the ranks of the super-rich, they will have to learn how to survive on a limited budget at some point in their lives so they may as well start now. The important lesson here is that money is finite and that you do not have a bottomless purse or wallet. One drastic way of doing this is to add up everything you spend on them in a month (clothes, transport, activities, and treats) and hand the whole lot over to them to manage. They will soon see how tricky it is.
Also, provide them with a debit card so they have a written record of where all the money has gone. It is very hard to keep many cash and you end up having to keep many fiddly receipts that can easily go astray.
Teach them the joy of savings
Introduce your teens to the concept of interest. Let them see the joy of receiving money on their savings, the idea of unearned income will appeal to them. Then show them how much interest you have to pay when you are in debt. The harsh reality may put them off running up huge debts when they are older.
The problem with this is that if interest rates are low, the may not be very impressed with their return. You could throw in a few treats of your own as an incentive for them to save.
Teach them how to shop around
Wanting the very latest gadget or a pair of designer trainers is not the same thing as wanting to pay more than you have to for them. Turn your teen into a bargain hunter by teaching them how to shop around and compare prices. Show them how to get voucher codes and how to sign up for special offers. They will soon be savvy consumers just like their Mom and Dad.