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When it comes to financial literacy, most teens fall somewhere between “not enough cash to spend” and “won’t see either of us again if they don’t get their act together.” Although it can feel like you can’t conduct a Google search about personal finance without coming up with another statistic about how few teenagers have their finances in order.
And that goes triple for teenagers who are also transitioning from being supported by their parents to being primary contributors to their own household expenses.
It seems that most young adults struggle with money management. Statistically speaking, this is because many of them are first-time earners and primary spenders but not yet financially independent adults.
Accordingly, while financial literacy programs abound in schools, they often focus on a future audience rather than the teens who need them most right now.
If your teen is struggling with money management and doesn’t know where to turn for advice, read on for five tips on helping your teen learn to save money.
Plan for the Future
Your teen might be grounded in the present and even the past, but they have to think about the future, too. Especially if they have financial obligations that extend beyond the next few paychecks. Getting your teen to think about their future and how they’ll meet their obligations in that time can help them to see their present situation in a different light.
There are various ways to prompt teens to think about the future.
- What are their specific, long-term goals?
- What resources will be necessary to meet these obligations?
- What are and are not within their control?
- What can they do now that will put them in a good position later?
Don’t Feel Responsible for Everything Right Now
Teens are notorious for taking on too many obligations, too soon. This is partially because they’re often anxious to prove themselves and partially because they don’t have the financial wherewithal to back up their responsibilities.
Your teen might feel that they have to cover the cost of their own car repairs, for example. This might be a great way to learn. But your teen might also have no idea how to pay for repairs because you’ve been covering them for years.
Your teen’s early financial experiences shape their later, adult approach to money. If your teen always has the option to defer payment for services, they won’t have the experience necessary to navigate the adult financial landscape.
Get a Grip on Debt
Debt can be a useful tool when used wisely. It can also be a terrible burden that keeps your teen from building savings and getting their financial lives in order.
Teens who have been gifted a credit card or who have been allowed to charge to a family card may have a hard time understanding the ill effects of this debt. Make sure your teen understands the damage that can be done by charging to the max and not paying on time or in full.
Remind your teen that they’re not just hurting themselves but whoever they owe money to, too.
Develop Good Habits and Behaviors
Good habits and behaviors have a far longer reach than you might think. If your teen is using a budget to pay for their expenses, for example, they’re more likely to stick to it. Your teen might not understand the importance of consistent saving.
Or they might know that they’re supposed to save, but not know how much to set aside or where to put the money once they’ve saved it.
Teens who haven’t developed good habits are less likely to save than those who have found a system that works for them. All it takes is some experimentation to find a system that works for your teen.
Take Care of Yourself
If you’re reading this, you might be a parent helping your teen with their finances. Or you might be a friend or loved one encouraging your teen to get a handle on their money.
Either way, you need to take care of yourself, too. Your health is critical if you’re going to take the time to help your teen understand their finances. If you’re tired or under too much stress, you might not be able to focus on the task at hand.
Teens who don’t see you as a healthy and present adult are less likely to talk to you about their finances than teens who see you as an authority figure.
Bottom line
A good financial literacy program for teens must focus on the present. It must also be relatable to teens and address the challenges that they’re facing today.
A good program will also engage teens and encourage them to take control of their financial future. If your teen is struggling with money management, it might be because they need some extra help. With these five tips, you can help your teen learn to save money.
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