Budgets matter. Even though we would love for our children to live in a world that doesn’t take into account the money in their bank account, the sad news is that we have to make our children aware of money. They need to have enough money to not only take care of their bills but also have enough to do what they love most on the side. Without one, the other just doesn’t work. If you have all of the bills covered but nothing left over for fun and games, you’re not going to be happy. On the other hand, if you have a lot of money for fun but none for bills, then you’re still not in balance.
Now, your teenagers might still be at home living with you most of the time — except for the occasionally sleepover, but that doesn’t mean that personal finance goes out the window. That doesn’t mean that they no longer have to think about all things finance. They still have to step up and ensure that they will have plenty of options for the future. It’s been shown that teenagers that have solid personal finance skills will do very well as adults. If you teach your children how to earn, spend, and save money, they will never have too many problems with money.
The Basic Laws of Finance
In order to get ahead with your life, you really need to be able to either raise your income, or lower your debt. Since teenagers generally don’t have a lot of debts, it’s important to show them the power of money. If they aren’t sure what they want to do for college, see if you can arrange a job shadow day through their school. Show them about different professions or even look at their grades. Teenagers that have great grades and passion for math and science have a wide world of very profitable careers ahead of them — researchers, actuaries, accountants, even computer programmers. Computer science is still a popular pick with steady incomes that are only going to rise over time as our world gets more and more technical. Engineering is always a classic favorite as well.
A lot of schools still embrace the “go with what you love and the money will follow” plan, and that’s noble. However, in today’s student loan packed world it’s important to make sure that you pick a discipline that’s going to give you a return on your investment. That’s something that can be hard for teenagers to think about, especially as you combat the social element. If your teens are the only ones getting these lessons in money, chances are also good that you’re going to get a lot of pushback when you try to make it a permanent thing. If other teens aren’t doing the same thing your teenagers are, it can lead to some resentment. Continue to reinforce just how important it is to actually learn these lessons. You don’t want to watch your teenagers struggle later in life just because they wanted to fit in.
Since it’s the summer time, you can encourage your teenagers to get a job. A job that takes them onto a payroll is a good fit because it will also take out taxes — something your teenagers are going to have to deal with sooner or later, so why not now? You can explain the ins and outs of taxes, including the fact that they can get a refund every year and most often will until they start making serious money.
If you have a teen that’s really into business, that’s great. Still, you don’t want them to chase ideas after idea and end up discouraged. SCORE is a volunteer organization that fits teenagers and other people with retired executives. This is a great way to get mentorship and information that you only usually accumulate after a lot of experience. Theory is great and you should encourage your teenager to read everything they can about business but there’s really no substitute for on the job experience. See if they can volunteer in the industry that they’re most interested in — writing, advertising, marketing, and technology are all fields that love taking on interns and unpaid internships are better than nothing — you still get the experience. If your teenagers are really good at what they do they can even get hired at the company which could lead to more opportunities.
Through all of your lessons you want to make sure that you keep a firm but open dialogue with your teens. If they feel that you’re not going to support them, they’re going to lash out at you. On the other hand, if they know that they can bring any trouble to you and you’ll help them, then they’re a lot more likely to let your personal finance lessons sink in and stick for life!