I’ve done a lot of research and have worked with other organisations around teaching children about money, so I wanted to share with you my 17 ways to teach teenagers about money.
For those of you who have teenagers or children approaching their teenage years, this is one of the most important topics of conversation that you can have with your children at this stage.
Money is still such a taboo subject in society, so the more we talk about money with our children the more our children will be open to talking about money.
Get them excited about money! When you tell kids what to do, the reality is that they tend not to listen! So when we’re talking to teenagers and thinking about ways to teach teenagers about money, I think it’s really important that we don’t just tell them how to manage, grow, save, and invest money, but actually to show them.
If you’re reading a book about money, leave it lying around for them to pick up at their own will. Maybe share and listen to podcasts together. Having these things available for them to explore is a way of giving them what they need without directly spoon feeding them.
Start having open conversations about money. Find a time, roughly once a month to have a ‘money date’ with your teenagers. During the date you can talk about money that they have and their plans for it.
Give your teenager some responsibility around money. Teenagers love the feeling of being trusted and being given responsibility over money, so even if it’s something small this is a great way to get them excited and engaged.
Give them an allowance. I’m not necessarily advocating rewarding teenagers for chores because I believe that these are things that are simply part of living together as a family. But equally learning how to manage money in a real world environment is a great thing. So think about, for example, giving them a monthly clothing allowance. If they want designer labels, they may have to save that allowance. So you give them the allowance, and they have to manage it.
You can also use this to teach about solving problems. In the real world, we earn money by providing services that solve a problem. You can help them to think about what they can do to earn money that helps to solve a problem.
Help them to understand the value of money. Get them watching programs like Dragon’s Den! A key part of financial education, especially for teenagers, is helping them to understand that companies are there to sell and make a profit. So for example, helping them to understand that a company like Apple, for example, they can buy from them, but they can also invest in them. Looking at these companies in terms of the value of the products they offer and the fact that they are directly focused on making a profit and selling them products, will help them to understand real world value. And if they are already loyal customers of these companies, could they look into investing with them?
Show them the costs of managing a home. This is a big one that I wish I’d have had as a teenager! It doesn’t have to be in any major detail, but just talking to them about the costs they are going to encounter and how that affects them in the real world. So explaining why you ask them to turn the lights off when they leave a room, or what you pay each month for water.
When we think about ways to teach teenagers about money, often the most valuables lessons and tools are the ones that mean something to them in the right here and now.
Get them involved in managing the household bills. You can start by getting them involved in the weekly food shop. Encourage them to get involved with the shopping list and even placing the online food order within a budget. This is a great one for getting them prepared for going off to uni, and can even save you some money if they are giving you direct ideas about what they and don’t want to eat!
Managing Needs VS Wants. Talk to your teenagers about the things they they want to spend money on in terms of do they need it, can they afford it, and will they actually use it? Anything that is on their want list they can then create a plan to save for that purchase.
Help to expose them to marketing and the concepts of marketing. As I said above, companies are there to sell their products. So talk to them about companies use psychological marketing to encourage us to buy things that we don’t necessarily need! The add-on items at the supermarket checkout is a great way to start this conversation. Often shops like Boots will actively offer you up-sell items at the checkout,so explain that process and why they do that.
Teach them good habits early on. Talk about money being there to help them to feel secure. Actively avoid using words and phrases that make it seem as though money is hard to come by or hard to earn. Teaching them it’s about working smarter, not harder is great when thinking of ways to teach teenagers about money.
Teach them to steer clear of bad debts. You may have heard of Martin Lewis’ Good Debt VS Bad Debt, and the Money Saving Expert website has some great resources that are well worth looking at. Teaching them that not all debt is bad or good is especially important if your teenagers are nearing university age. Having a conversation about the types of debt they may encounter through university, and discussing whether there are alternatives is a good way to start to talk about good debt vs bad debt.
Investing in your education is a good debt to have, just as investing in a mortgage is a good debt to have. These are growing assets and investments in their future so it’s important for them to understand that not all debt is bad debt.
If you have any bad debt of your own, don’t be afraid to talk to them about it. Explaining and showing them the circumstances that can sometimes to lead to bad debt can help them to spot, and hopefully avoid, these things in their own lives.
Teach them how to read payslips. Showing them and explaining to them where portions of their money goes, for example to tax, national insurance, your futures self. Explain to them where this money goes and what it does. So their national insurance might be paying for their grandparents pensions, their auto-enrolment pension via NEST is supporting their future selves, and explaining the types of things that their tax will pay for.
Get them interested in investing. Particularly if you’re talking to them abut their payslips and pension auto-enrolment, you can talk to them about how this pension works and that actually their money is already being invested through this. You can use this to get them thinking about the benefits of investing, which can lead on to explaining how they can buy a slice of companies profits through buying shares.
Teach them about compound interest. Explain to them the benefit of putting a little money away each month. The first month they get a little interest, then they add a little more money and now they get interest on the money they’ve put in PLUS the interest they already earned.
There’s some great funky videos on YouTube they can listen to if you’re not comfortable explaining this yourself. You can maybe even think about rewarding them for investing their time in learning about these things!
Be a great role model. Kids model what they see and what they hear. You don’t necessarily have to obvious about it, but if they see you having conversations about money, managing money, moving money into pots etc, then generally they will pick up and model this.
Read books. There are a ton of books that teenagers can read to help educate them around money depending on their age. I’ll pop a list below.
Maximise the free resources that are available to you as their parents. There are some amazing free resources available online.
For example, The Money Charity provide a free student money manual on their website, which is designed to help teenagers manage their money at university and beyond.
Martin Lewis’ website has lots of free resources, including downloadable PDF’s called Teen Cash Class.
17 Ways to Teach Teenagers About Money – BONUS TIP!
I’ve recently opened GoHenry accounts for my boys, which is an app that’s been designed by parents. It’s a prepaid card that you can load money onto for your kids. The great thing about GoHenry is that you can set up automated allowances to transfer onto their cards at a specific time each week or month, and that you can also set reward amounts for other activities. Once you check to agree that they have completed the task, they are paid their money.
The app has a parent app and also a children’s app view so that they can have the app on their devices and keep track of their money. Through this, what’s great is that they can set up their own savings pot and even automate what goes into it and when. There is also a giving option which allows them to set an amount to give to charity. When we think of ways to teach teenagers about money, giving them this kind of autonomy over how they manage their money is a fantastic tool.
Each account is usually charged at £2.99 per month, per child. If you use this link that we have been given by GoHenry, or click on the image above, you can get 2 months completely free.
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