The teenage years are like a dress rehearsal for adulthood, where your teen is figuring out who they are, making a few awkward mistakes, and hopefully learning to cook something other than instant noodles. It's also the perfect time to start building strong financial habits! Here are our six tips to get you both on the road to developing strong financial habits that will stand to them in the future:
1. Start the Conversation Early and Be Consistent
It's never too early to ‘have the chat’ about money. Even before they hit their teenage years, you can introduce simple concepts like saving and spending. Make money talk a regular part of your family conversations. Discuss the weekly grocery bill or explain why you save for holidays. The key is consistency; the more comfortably you discuss finances, the more comfortable they will be. Normalise the conversation around money and let them see it as a part of everyday life.
2. Make Sure They Have Their Own Account
If they don't have one already (in my day our communion money went straight into the bank!), encourage them to open their own bank account. Children's accounts are designed specifically for young savers and spenders, giving them financial freedom while allowing you, and them, to monitor their progress.
3. Encourage Them to Work Part-Time
Getting their first job is a big milestone for teenagers. It helps them understand the value of hard work and introduces them to important concepts like wages and taxes. It also instils a sense of discipline, which is important when they transition to full-time employment. If they're not ready for a job yet, consider assigning them chores at home with an earning system in place.
4. Teach Budgeting Together
Budgeting is a crucial life skill, and modelling this behaviour can be one of the most beneficial things you can do as a parent. Sit down with your teen and create a budget together. Show them how you manage your finances, explaining necessary expenses versus discretionary spending. There are many apps and tools available to help. Setting financial goals will help them understand the importance of planning for both short-term desires and long-term needs.
5. Encourage Savvy Saving and Smart Spending
Instilling the habit of saving money is essential. Consider setting up savings challenges with them—this could be a certain percentage of their allowance or income from a job. Encourage them to save for something they really want, latest iPhone anyone. This will teach them patience and the value of delayed gratification. Additionally, discuss the difference between needs and wants, you need a phone, you want the latest iPhone. This helps them make informed decisions when it comes to spending their hard-earned money.
6. Lead by Example
Finally, remember you are your teen's first and most influential teacher—model good financial habits in your own life. Be transparent about your financial decisions and involve them in age-appropriate discussions about your budgeting and saving processes. When they see you practicing what you preach, it reinforces the lessons they are learning and encourages them to develop their own good habits.
Watch our short video: Teens tackling finance for more.