Talking to Your Teens About Money
Today's teenagers, overall, are tech savvy, entrepreneurial and are global citizens.
According to a study conducted by McKinsey, they're "the first generation of true digital natives," which means they've grown up online, giving them unlimited access to financial information and advice.
Most parents would agree that it would be great to talk to their teens about money, because they want them to become confident managing money and to be set up for success. But it may be challenging to find the right words or know how to start the conversation.
Getting your teen to listen isn't an easy task at the best of times.
Start the Conversation by Learning More About Your Teen's Goals
Engaging in conversation about money doesn't necessarily have to start with topics such as investing, saving, or spending. Most teenagers (and even adults) are uncomfortable talking about money.
With this in mind, the best way to start a conversation about money is not to lead with it. Connect with your teen about what matters to them the most: their life, goals, dreams and aspirations. You may be surprised by how receptive they are to this approach and how much they open up to you.
You can begin by casually asking your teen about whether they've given thought to their future, or thoughts about life after high school. See where the conversation goes. Find out if your teen has some very specific goals in mind. Goals can be short-term or long-term. For a teen, short-term goals are generally 6-12 months. Long-term goals could be something further down the line, like higher education or travelling.
Encourage your teen to create a personal roadmap to achieve their goals. It can then lead to the financial implications.
Help Your Teen Make Trade-Offs
According to a recent story by Inc, today's teenagers have enormous spending power, from either working part-time or receiving allowances/gifts. They're typically debt-averse and understand that post-secondary education is expensive.
They typically also understand trade-offs, and it's important they learn to make the connection between buying things and saving for their goals. For example, if your teen wants to buy a new pair of sneakers, you can help them see that using money to buy them now means trading off saving that money for longer-term goals.
Encourage Your Teenager to Live by their Values
When talking to your teen about money, you may also want to find out more about what they value. Many are socially minded and care about what's happening in the world. They value friendships. Teens today want to make this world more sustainable and are actively engaged in volunteering and making their communities better places to live. Many are looking to find greater purpose and meaning in life, and this has relatively little to do with money.
If you want to talk to your teen about money, it's best to start with learning more about what they value and their personal goals. Connect with your teen on a personal or deeper level, and they'll eventually start talking about money with you, too.
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