We all want our children to be prepared to meet the financial realities of adulthood with confidence and competence. We know that our quality of life is largely determined by our ability to think about and organize our money so it works and grows. As a financial educator, I am committed to supporting families to succeed in this mission.
While we all know the importance of good money management skills, we don’t always know what is appropriate and important for teens to know. The fact is, we carry the habits and attitudes toward money that we develop in our youth into adulthood, so it’s important to start out in life with an excellent foundation. In this article, I offer a basic lesson for teens and a basic list for educators.
Lesson 1: Keeping track of your money.
Core Concepts: Our habits and attitudes toward money determine our net worth. One habit that people who are masterful with money have is that they keep track of their money.
Activity: Start a money journal. Designate a composition book of some kind as a Money Journal and make a chart of all the money you have, where it’s located, what it’s for, and if it is compounding with interest. This chart can look like this:
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Date |
Amount |
Location |
Purpose |
Interest rate, if any |
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Be sure to list all of your money, even the change in your change jar and the money in your pants’ pockets!
Follow up: Every month, add a new entry. Notice how the money that is in interest-bearing accounts grows, little by little.
Advanced lesson: For each amount that is in an interest-bearing account, project the value in 10 years, and in 20 years, and in 30 years. You can do this easily by searching on the internet for a compound interest calculator and using that. Here’s one place to look: www.moneychim.com/calculator/compound_interest_calculator.htm
This activity is a GREAT habit to develop! It will make a huge difference in how you think about your money! Most of us don’t really know how much money we have, and we often like to avoid the question altogether. When it’s a habit to keep track of your money, you will discover that money isn’t something to avoid; it’s really quite simple to keep track of it, especially when you do it every month.
Tips for Educators:
As parents, we really can’t avoid transferring our habits and attitudes toward money to our children. In most cases, they will either adopt them or develop the opposite views and habits, as a reaction. This isn’t bad, it’s just natural. That means we have to be very intentional about the ideas and habits we pass on to our children. Here are a few suggestions:
We can support and encourage our children to keep track of their money as a monthly habit. This way, they avoid developing the feeling that money management is complicated and something to be avoided.
We can avoid teaching our children to have negative associations with money. For example, when we teach ideas such as, “Rich people are shallow and greedy,” we actually discourage our children from becoming excellent money managers. We can teach, instead, that money lets us express ourselves. Greedy and shallow people, after all, come in all sizes, shapes, and socio-economic backgrounds, and so do generous people! We want to check that our children are not developing prejudices and stereotypes.
People who are masterful with money engage in lots of experiences where they get to explore it. That is a lifelong habit that we can begin to develop as teenagers. There are programs and websites that offer teens these kinds of experiences. Let’s avoid the syndrome of thinking that “We are taking care of this” regarding our children’s financial education. Teens need to learn about money from lots of different sources, and to continue to do so as a lifelong money learner.
Imagine that your teen continues his or her money habits that he or she has now through their adulthood. Would that be workable? Habits and attitudes are difficult to change, especially when we have practiced them for years. If your teen is a spender, will that be workable for the rest of his or her life? If your teen is a saver, that’s one to really pay attention to! Savers can be just as frustrated with money as spenders, it just looks better! Savers often develop the habit of holding on to every bit of their money because they are afraid they won’t or don’t have enough. The healthy goal is to teach our children to save AND spend in a managed way. Managing money is about saving AND spending!
Finally, I acknowledge you for your commitment as parents and educators. In the Charles Schwab 2008 Parents & Money Survey Findings and the Teens & Money 2007 Survey Findings, parents and teens report the following:
• 79% agree that money matters are different for them as a teen today compared to when their parents/guardians were teenagers
• 89% say they want to learn how to make their money grow.
• Two-thirds (65%) believe learning about money is “interesting.”
• 60% say that learning about money management is one of their top priorities.
• Teens say they are motivated to learn about money matters such as budgeting, saving and investing “to pay their bills” (88%); “to stay out of debt” (88%); and “to not have to rely on others for money (85%)."
• Despite overwhelming interest (89%) in learning how to make their money grow, only one in five (20%) report that “my parents/guardians have taught me how to invest money wisely to make it grow.”
• Parents don’t realize their teen is interested in learning about personal finance:
• Two-thirds (67%) of parents believe that learning about money management (including budgeting, saving and investing) is not one of their teen’s top priorities.
• The Schwab 2007 Teens & Money Survey showed otherwise: Almost two thirds (60%) of teens stated that learning about money management was one of their top priorities.
As we work with our teens to prepare them to live extraordinary lives and make a difference for the greater good of humanity in ways that are important to them, we are all empowered and better for it in profound and lasting ways.
Serving a world-wide community of teens who build and celebrate wealth responsibly...
Jill Suskind, from Andover, MA, has been a public school teacher for the past 23 years. She is currently on a leave of absence, thrilled to be working full time on her mission: to prepare this generation of teens to meet the financial realities of adulthood with confidence and competence. She is committed to be a valued resource and partner for the homeschooling community. Jill is most eager to hear readers’ thoughts, questions, and feedback so that she may serve this powerful and growing community. This month, WealthQuest for Teens Basic Seminar is on sale for $25! It only takes about an hour to complete, it’s narrated by teens, viewers complete an interactive workbook online as they progress through the program, and it’s a blast! Please visit www.wealthquestforteens.com to register.
