Teaching Teens Financial Responsibility: Your Role Defined

It’s a cliche to say that teenagers never seem to listen, and sometimes things are cliche for a reason. The conundrum of teaching teens fiscal responsibility is doubly challenging because, as their guardian, you’ve paid for essentially all of their expenses prior, this is an area they’ll eventually have to manage without you, and for many teens spending money is one of their first forms of freedom.

Unfortunately, the only known cure for being a teenager is time; however, here are some tools and ideas to keep in mind when you’re doing your best to teach the teen(s) under your roof the value of a dollar.

  1. Remember your teenage years. The angst, the uncertainty, the hormones—being a teenager is an experience everyone goes through, and almost no one comes out unscathed. Sometimes people – especially adolescents – don’t listen because they don’t feel listened to. A little grace can go a long way, so before we begin with the actual financial lessons, perhaps remembering your teenage misadventures will help drive your lessons home.
  2. Be open and honest about finances. When dealing with financial stress, challenges, or even regular ol’ bills, invite your teen to listen and discuss what you’re working on (within reason). If you have a credit card bill that’s gotten out of hand, perhaps invite them to the table to discuss how to address it. They may have some creative ideas on how to address it, and you can discuss the perils of high interest rates and instant gratification as well as the virtues of budgeting and cost-cutting with them. Don’t scare them that the house is in jeopardy, but don’t dismiss the potential gravity of the situation. Being honest about financial consequences shows them respect and may even inspire them to be honest about struggles they’re experiencing too. Asking for their insights may prove helpful and promote problem-solving. Again, just maybe don’t lay every struggle on their shoulders.
  3. Bring them along for the ride. If you’re car shopping – especially if you’re car shopping because they’re starting to or already driving – go through the buying process with them by your side. Ask their opinion on what they’re looking for in a vehicle, then show them how the bells and whistles have corresponding price increases. Let them play around with payment calculators, so they understand that while that price tag may seem reasonable, there are other factors (like insurance and interest rates) to add in as well.
  4. No, seriously, bring them with you. Many parents open savings accounts for their children with the knowledge that one day the child will take it over. Then, once their child becomes a teen, it’s turned over – sometimes along with a brand-new checking account – for their disposal. But the teenage years are when they’re figuring out almost every aspect of what it means to be a “functioning adult.” Would you give a 15-year-old the keys to a convertible before they’ve had lesson one on driving? If you would, you’re more daring than most. Expecting a teenager to know what to do with their savings, checking, or money without proper instructions is similar. But even bringing them to a financial institution only for business concerning their accounts likely isn’t enough. Instead, bring your teen with you when you need to conduct any banking. Let them observe and get a feel for how banking works. It will also take the pressure off them when the time comes to conduct their banking.
  5. They’ll figure it out one way or another. Despite all your efforts, lessons, and advice, they still won’t listen. Even if they do listen, it doesn’t guarantee they won’t make their own financial mistakes. At some point, they may blow through all the money they’ve earned or saved up and will turn to you to bail them out – metaphorically speaking, of course. Even the most diligent, fiscally responsible teen can fall prey to spending sprees or account negligence (typically during their first year living away from home), and they’ll turn to you for cash. Offer what you can, and as they start to become more and more independent, start turning over more expenses for them to manage: phone bills, car insurance, streaming services, etc. Gradually handing these responsibilities over lets them develop their budgeting abilities without completely overwhelming them. Then one day, both not soon enough and all too quickly, they’ll be out on their own.

Experience is often the best, if not least forgiving, teacher. But knowing they have you as a safety net and guide for navigating finances goes a long way. Hopefully someday, once time has cured the teen in your life, they’ll appreciate that. But you don’t have to be their only financial guide, and you certainly don’t have to be their only resource. Bring them to your credit union to start building their financial experience. Whether it’s your littlest’s first share account or your teen’s first job, their trusted credit union is always here. Even when you can’t be there, we’ve got them covered.

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