The Talk: the invaluable words every teen should hear
by Brenda Campbell, president and CEO, Make A Difference – Wisconsin
Have you given the young person in your life “the talk”? The talk about money, that is.
Learning about money is an inevitable part of growing up. However, preparing teens to live independently can be one of those touchy subjects for parents/guardians, more daunting than talking about sex or drugs, as this Charles Schwab study puts it.
In my previous blog about first paychecks, I mentioned that there was one, very important way you can help the young people in your life stay on top of smart spending habits. It all comes down to talking with teens. While it’s smart to start conversations with younger children – around allowances or piggy banks – the best chance to establish strong financial behaviors occurs during the teen years. At that age, the topic of money carries more relevance and typically holds a big promise from early budgeting and saving.
So, when and how can you have “the talk” with teens in your life? Here are teachable moments when you can start the conversation:
Applying for first/summer jobs – Even in just applying for initial or summertime jobs, you can talk through a few key features of personal finance with teens. As they’re looking for summer work, find out about minimum wage and make sure they have somewhere safe to cash and deposit paychecks. Why not set a savings goal for what they earn (and if you can, kick in a “bonus” if they reach it)? If they land that job, pass along some perspective. Ask the new worker in your home to figure out how much they’d have to work to buy the latest, greatest phone.
Completing college applications (and FAFSA) – College finance talks shouldn’t end with the application fee. If applicable, make sure you and your teen complete the FAFSA (or find help from one of the many local resources). Walk through some simple math on the money that accumulates from interest on a loan. (You can find one here and another here.) And emphasize how important scholarships can be in the whole equation.
When you reach for that credit card – One rite of passage with turning 18 is a flood of credit card offers. Problem is, too many young people don’t really understand the long-term ramifications of credit, or how it differs from debit. The next time you use your credit card to buy something in person or online, bring your teen near and ask if they know the real cost of the transaction you’re about to make. See if they can tell you three reasons to pay off the full balance of your card each month. And if they have already received one of those credit card offers in the mail, walk them through the whole thing, especially the fine print.
A trip to the grocery store – Shopping can be one of those experiences where young people see money add up quickly. Ask your teen to tally the cost of convenience store and fast food trips as part of a budget of weekly or monthly spending. In my organization’s work with teens, the top source of wasteful or unrecognized spending comes from food. As Damari, a teen at Milwaukee’s Transition H.S., told me in a class last year: “I can eliminate irrelevant expenses. Fast food could be one thing I don’t need every week.”
For certain, parents and guardians may still not feel comfortable or confident with their ability to share good advice with the young people in their life. If that’s the case, there are a host of regional and national organizations eager to bring experts and lessons into schools or community organizations. Scan the Money Smart Week listings for suggestions near you, even after all the financial literacy hype has died down. With less than one-third of U.S. schools required to teach students about personal finance, you can make a major impact by identifying resources and starting conversations in your own home.
Have a good (or bad … or funny …) story about talking personal finance with teens? Share it through the Facebook and Twitter links below.
Brenda Campbell is president and CEO of Make A Difference – Wisconsin, a nonprofit based in Milwaukee that believes every teen deserves to feel confident and capable with money. With Campbell at the helm since 2006, Make A Difference – Wisconsin has empowered more than 55,000 teens through hundreds of volunteer-led lessons at schools and sites across Wisconsin and into Chicago. Campbell has years of experience in program development, management and evaluation in the areas of financial literacy, education, workforce development and child welfare. You can reach her at email@example.com.