Teenagers and Money

As children get older and become teenagers it is time to sit down with them and have that all important talk … no, not about the birds and the bees… but about money and how to manage it.  Many parents avoid talking to their teenage children about money because they are poor at managing money themselves.  Parents are encouraged to openly discuss money with their children and if they do have a large debt, whether that be a home loan or credit card debt, involve teenage children in the process, explaining to them how you budget to make payments each month and what your plan is to pay the debt down.

Communication
This will help them to understand how to live to a budget and why you cannot spend endless amounts of money on them.  You don’t need to know everything about money to assist your teenage children to develop their money skills.  Communication is the key and sharing your knowledge with them will assist them greatly.  Take the time to explain to them how the family budget works and that as a family you earn a certain amount of money each week and your goals is to spend less money than you earn.  Sit down with them and involve them in the setting of the family budget. Explain to them how the money is allocated for their clothes, school expenses and weekly allowance and what the budget is.  Use an excel spreadsheet or organise a joint account with them so that they have to budget and spend money accordingly. While the Financial Literacy Foundation has been working to develop a curriculum in schools that will assist teenagers with financial education, like all good learning, the key financial messages should be taught in the home.

Money Doesn’t Grow on Trees
Most children will observe their parents paying for the goods by credit card or every time they need some money, they go to the ATM.  It is important to teach children that money is not just available whenever they want.  Sit them down the next time you pay your bills and show them exactly how much different things cost and how you actually pay for them.  Show them that everytime you take money out of an ATM, that the balance decreases and every time you use your VISA card, the balance increases.  Involving teenagers in the shopping is another great way to help them understand how quickly the cost can increase.  Teach them to track their spending and they will be surprised at how quickly the money lasts (or doesn’t last).

Plan Purchases
Teenagers are conscious of what they wear, what they own and what their friends are doing and will often want money for designer clothing, toys, games or money for entertainment.  Ask them whether a purchase is a luxury or a necessity.  If the purchase is a must-have, work with them to develop a plan on how they can earn the money to buy them.  If your son wants an iPod worth $180 and works for $15 per hour and he has learnt to save half of what he earns (see below), he will need to work for 24 hours, or 6 weeks if he works 4 hours per week, before he has the money to purchase the iPod.  This is a great way to educate teenagers.  Another suggestion is to ask them to hang off for a week and then revisit how important the purchase is for them.  Many teenagers have moved on and realise that it was more an impulse buy rather than a real need, and they can save a lot of money by delaying their purchase.

Their Own Budget
As a teenager, utilising a budget can be very powerful for their long-term financial education.  There is only so much money you can provide to them for all their wants so now is a good time to involve them in the family finances.  Of course each family will be in a different financial position and this will decide the allocation of money.  Encourage your teenager to keep a detailed record or receipts each month of how their money is spent and then assist them to compare the amount of money spent with the agreed budget.

Starting Work
Teenage years are a great time to start working with many teenagers starting jobs at the local supermarket, bakery, shops, McDonald or even as a swim teacher.  Once teenagers start part-time work, they can get into a regular pattern of being able to save.  It also enables them to become more independent and helps them to buy things they really want. When they do begin a job, talk to them about the future, their first car or a major electrical purchase and help them to set up a savings strategy whereby at least 50% of their income is saved towards the purchase.  When they start work is also a great time to teach them to take more responsibility for their own expenses.  If they have a mobile phone, and most teenagers do these days, and their primary use is to chat or text others then now is a good time for them to take over the bill. 

Teaching teenagers about money is one of the most critical jobs for a parent, and the more you involve them in finances, the better opportunity they will have to take control of their own financial destiny.

	Rich Dad Poor Dad for Teens: The Secrets about Money--That You Don't Learn in School! The #1 "New York Times" bestselling authors of the blockbuster Rich Dad Poor Dad series reveal their groundbreaking financial advice to teenagers with examples, sidebars, and straight talk. Rich Dad Poor Dad For Teens is a joint publication between Warner Business Books and Little, Brown Children's Books, intended for both adults and children to share. Robert T. Kiyosaki is a tireless promoter who continues to get his words of financial advice out to mainstream consumers through his bestselling books, board game, electronic game, and national seminars.
	The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed of The pioneers of cyber-investing and personal finance education direct their wry, irreverent approach to a new young audience, delivering serious advice in fun-to-read, accessible language. This guide is designed to help teens begin investing, build a portfolio, and take advantage of the years ahead to watch their profits grow.
	The Teen Girl's Gotta-Have-It Guide to Money: Getting Smart about Making It, Saving It, and Spending It! Suze Orman advises women on how to handle their money--and now Jessica Blatt advises the women of tomorrow on how to handle theirs. The newest addition to the Teen Girl's Gotta-Have-It series empowers girls by showing them why money matters. From making money, to saving money, to investing money, to spending money, "The Teen Girl's Gotta-Have-It Guide to Money" is packed with sound advice and innovative ideas for helping girls manage their money wisely, starting right this minute. Real-life examples and upbeat text show girls that smart money habits aren't just about scrimping and saving--they're about creating freedom, choice, and independence. Quizzes, entertaining illustrations, and interactive elements (including a personalized real-life money plan) make learning about money fun and non-intimidating. Developed in consultation with finance expert and savings educator Variny Paladino, this book costs just $8.95--but the advice it offers is worth a million bucks.
	Start Talking Cents: Teach Your Children and Teens How to Manage Money Parents are increasingly anxious about their children's future financial security. The job market is very competitive, and we watch young people leave the education system carrying a burden of debt before they even join the workforce. At a family level, there are other stresses. Life is more frenetic. Time is scarce. So how does a family navigate its way through this uncertainty? How does a family ensure that their children will grow up with a positive, realistic understanding of the role of money in their lives? How do we ensure that they will grow up to be financially savvy, debt free, and ready to face the risks and opportunities of their future? That's what this book is about. It deals with the money issues faced by families, with a particular focus on how to raise children to be smart with money. Start Talking Cents covers: *how to teach money skills to children - from preschoolers to 18-year-olds *pocket money and allowances *working kids *saving and investing *peer pressure and your children's money habits *should financial skills be taught at school? *paying for your kids' education
	The Complete Idiot's Guide to Money for Teens
	Make More Money (Money matters)
	Manage Your Money (Money Matters S.) We all need money in order to live the type of life we want, and to help make our dreams come true. Find out how to be in charge of your finances - it is never too soon to start planning for the future. Features include: case studies, tables and graphs, 'Dollars and sense' money hints, comprehensive indexes and much more. Ages 10+
	Managing Money (Smart Young Consumers)