Talking to teenagers about money

Our responsibilities as parents are to prepare our children for adulthood, right?
We typically focus on discipline, morals, work ethic and respect because money doesn’t directly affect our children when they’re young. However, some common statements I hear from the adults I coach are, “I was never really taught how to budget” or “There is so much misleading information about credit, it’s just intimidating and overwhelming”. Apprisen is one of many agencies who promote financial literacy and we alone counseled nearly 14,000 people in 2016.
This tells me two things:

1. Our cultures financial practices are changing for the better through more employment opportunities and continued education in regard to finance.
2. We still have a lot of work to do as the elders, parents and caretakers to protect our children from financial failures and create a foundation on which they can succeed.

Here are some reflection questions I want you to ask yourself…

1. How did you learn to budget?
2. How did you learn the discipline to save?
3. How did you learn about credit reports and credit scores?
4. Do you wish you knew more sooner?

I am a parent of three and my eldest son just graduated high school. I knew it was coming, but once I was faced with that reality happening now; let me tell you, in all honesty my sense of urgency and panic went into hyper drive. You will question if you have done enough to prepare them. You will constantly have on the forefront of your mind, “Are they ready”?
You’re a good parent to focus on discipline, morals, work ethic and respect. The wonderful thing is all of these traits can be applied to financial matters. It’s important to have support outside the home like school or church, but these should be considered secondary reinforcements. The charge is to start the education at home. So, if you should do it, then how do you do it? Like anything, the earlier introduced the better! Here are some practical ways to get started.

• When your child is about to turn sixteen start talking about getting a student checking account and looking into getting their first job.
• Before they obtain either begin your conversation with budgeting.
  Remember earlier when I asked you how you learned to budget? Use your experience to start the conversation. And if you never truly learned yourself or feel that you’re not a great example, call in support. There is no shame it in it and in fact it shows wisdom and character on your part. You might even want to schedule a session with us to help improve your understanding and process before talking with them. Then, don’t be afraid to (and in fact I encourage you) to get technical. I mean write it down or put it on a computer. Play pretend with their soon to be first jobs money or an imaginary situation where they have money and expenses. Talk about once they start driving. How will they save for a car, how will they pay for gas & insurance, can they start to pay for their own cell phone, etc. It’s okay to put some responsibility on them. Life will too soon show them they are responsible for themselves and the truth is; you won’t be around forever. Beginning with budgeting allows you to smoothly transition into the topic of having a bank account.
• Getting a student checking account while they’re in high school is a wonderful opportunity for them to learn with you by their side. You can help them set-up, manage and monitor their account. Notice I said monitor not micro manage! This is when your relationship with them starts to shift a bit from authority to coach and confidant. You could even continue to do this through college, especially if you are footing the bill. Sit down with them, face to face before opening the account. Again get specific; what do you need to take with you to open the account? Call a few places ahead of time and ask about the different student account types and fees. Talk with them about why certain accounts may work better for them. Talk about direct deposit; what is it and how it works. Talk about writing checks and using debit cards, how to keep their account safe, what an overdraft is and how to avoid those fees. And most importantly discuss and decide how they feel most comfortable tracking their account. Here is another area where being a coach not a dictator is important. You may still use a paper register or an excel spreadsheet, but your child will likely feel more comfortable using an app on their phone or other type of electronic tracking system. And that’s okay. Everyone is different and what works for you may not work for them. Let them make a decision and agree that you will revisit it to see how it is or isn’t working after the account has been open for a couple weeks. The important thing is that they get the education.
• Give them time to get practice and become comfortable with budgeting and using their deposit account & then tackle credit. The best time is before they graduate high school or turn 18. If you have never been taught about credit, educate yourself while they are learning to budget and manage their bank account. Understanding credit before college is essential to their financial growth. It might also be a very good idea to bring your child to a certified consumer credit counselor to learn about credit reports and scores before they have one so they can begin early with a step by step plan for establishing good credit, how to use credit as a tool and how to make those tools work for them.

Knowing about money, how to budget, how to save and how to obtain and maintain good credit are the basic foundations of being a self-sufficient adult. And none of us are born with it, we have to be taught. You can do this, good luck!
If you have never had your credit pulled by a certified consumer credit counselor, I strongly recommend you take that opportunity now. Through Apprisen you get all the education you ever wanted and a specific plan for your own credit. If you would like more information about this or want to talk with a counselor yourself please call 1.800.355.2227 or visit us at www.apprisen.com