Teaching Teens About Money

Teens and Money: How should you handle money with your teenagers (Keep in mind this is coming from the perspective of a therapist)?

How Do Bad Money Habits Start In Teens?

I have seen the inappropriate use of money with children and teenagers cause enormous behavioral problems in teenagers.  Unfortunately, you might be the one modeling the money behaviors you don’t want them copying. At other times, you have excellent habits with money, but your teens aren’t forced to learn about how to handle their money.

A Typical Scenario

Here’s one scenario I have seen: Mom and dad have the finest of everything.  They drive brand name cars, carry brand name purses, wear brand name clothes, and shop at high-end stores.  Most likely mom and/or dad worked very, very hard to get there and have earned what they have.  

They also dress their children in these brands, maybe buy their children private sports lessons, and send their kids on elaborate school trips.  The children have not worked hard for these things, and assume it’s standard.  Even though these parents mean well, the result is often an attitude of entitlement among their teenagers- consequently their teens learn poor money management habits.

Another Common Scenario for Teens and Money

Here’s another scenario I have seen between parents and teens regarding money:  The parents cannot really afford to buy their children the nicest of everything.  However, because we all live in a county where there are many people who can, the parents feel guilt.  

Parents overextend themselves to keep their teenager outfitted with all the nicest things.  The kids do learn something about hard work because they know it doesn’t come easily to mom and dad. However, these kids are learning appearance is more importanct than being a teen with good money habits. They learn it’s worthwhile to go into debt to look like things are going really well.

Sadly, it can be very hard for them to just accept their position in life with grace and gratitude.  Instead, they look to things for happiness.

A Better Financial Option

A third scenario I have seen, and one I hope to emulate with my own children, is this:  Regardless of financial means, the parents force their children to live at or below their means.  The teens are required to earn their belongings, and are taught to take good care of their things.  

For example, if a teen drops their smart phone and the screen breaks, mom and dad don’t pay to fix it.  Their child goes without until the child saves enough to fix it. As hard as this is, these kids learn to delay gratification. 

When it comes to driving, since they never expected a car in the first place, they are extremely grateful for whatever they drive.  While it can be very difficult to see their friends get things without trying, most of these teens ultimately say they’re thankful they have cultivated the abilities to work, save, and give.  

Teenagers with good money habits are usually better at thinking outside the box too.  They’ll find ways to wear the same formal dress to a few dances, but dress it up differently so nobody knows.  When it’s time to go to college, they tend to choose a major that leads into a career because they really enjoy productivity. This saves a lot of headache later in life.

What Should You Do To Help Your Teens with Money?

Basically the point of this post is the way you use and discuss money has an enormous impact on your child’s future.  For those of you who had to scrap for everything you have, it’s very tempting to want to provide your child all the opportunities you never had.  You think, ‘If I’d had that chance…wow!’  However, you developed your toughness and grit because of how hard you had to work.  

It’s best if you come alongside your children as they show the ability to work.  For example, it’s much, much better to match their savings for a car purchase than to just buy them one.  It does wonders for their work ethic, self-esteem, gratitude and happiness.

A good resource for teaching teens about money can be found at Dave Ramsey’s website.

Helping teens grow and families improve connection,

Lauren Goodman, MS, MFT