I often wonder about the responses I hear when I tell people that I support parents who teach their teens excellent money habits and attitudes. EVERYONE’S first response is “What a great idea! I wish my parents taught me to manage my money!” Then, some people say, “You have to get them a job, first!”
What I feel is important is that people come to realize that managing your money LEADS to more money. It’s not a magic thing or a power-of-positive-thinking thing. It’s just how it works. When you manage your money well, you see it as a tool, not as a ticket to the mall. It takes care of the “Where did all my money go?” experience.
Most of all, though, it works as a motivator. You know how, when you want to accomplish something, like getting in good physical shape, the first step is the hardest? But then you reach your first milestone, and you think “Wow! I can’t wait to reach my next milestone!” And then you are on a roll. As you make progress toward your goal, it becomes more central in your life, and before you know it, it’s part of you.
When teens see their money working, the time and effort it takes to make that happen become worth it.
On the flip side, when teens don’t manage their money, they learn all kinds of misconceptions about it. They learn that money is a problem that can’t be solved, or some version of that.
Here is how to teach your teen to practice managing money in a way that is relevant to them — to their lives, their dreams, and what matters to them.
- Teach your teen a great money management strategy. Take it step-by-step. If you don’t know how to do this, check out WealthQuest for Teens’ Online Video and Workbook. It’s narrated by and for teens, and it’s convenient, affordable, interactive, and engaging. You can check out my explanation of the Silo System, which is a money management strategy designed for teens.
- Support your teen to implement the strategy in ways that make sense for you. That might include an allowance, or it might be in supporting them to get a job, or it might mean supporting them in managing their gift money.
- Check out other resources that make sense for teens. A great free tool for tracking their spending and saving is at http://www.moneytrail.net/.
- The simplest and most basic tip is to teach your teen to track their net worth on a routine basis. When I ask teens in my seminars, “How much money do you have?” they laugh! Almost none of them know. I admit, when I started to get my finances in order, I didn’t, either. It took me months to get all of my accounts and pensions and funds on one spreadsheet so I could figure out my net worth and then track it. This is a foundational habit that is incredibly powerful!
© WealthQuest for Teens, Ltd., 2012 All rights reserved worldwide.