The subject of Money and Teenagers is a biggie, so we’ve split it into two parts. In this first part we take a look at Responsibility, Accountability and Consequences.

When it comes to teaching your teens about money, you are going to be starting from one of two places.

The first is that you have been teaching your children about money from an early age, so they already have a good grounding in the value of money.  They have been receiving pocket money using whatever system you have put in place and they have learned the basic concepts of spending and saving wisely.

Or, you may have done none of that and you have a teen who has learned how to manage money by simply watching you and how you behave with money.

So, they might be doing just fine – or they may be great customers of the bank of Mum & Dad!

Whatever the starting point, the same basic concepts apply.  Understand your teen’s Money Personality, talk to them about money and be honest with them when they ask questions.

Think back to your own teenage years

There’s a lot going on.  Hormones are going crazy, boundaries are being pushed and life is all about you and what you want.

With all this going on, you are now going to add, ‘how to manage’ money into the mix.  Not an easy task for any parent, so lots of deep breaths, patience and conversation required.

You can’t abdicate this part of your parental role and simply hope for the best.  Nowadays, teens must make financial decisions that will affect their lives in a way that, as parents, we may not have had to concern ourselves with, e.g. tertiary education, digital toys, retirement.

So, it is vitally important that they understand how to manage money.

Plus, if you don’t raise a financially healthy teen, they may never be in a position to leave home!  And as much as we love our kids, at some point we want them to leave the nest and experience the big wide world!

Give your teen responsibility and accountability for some of their own expenses.

Their Money Personality will guide you on the starting point for this.  It may be working out a weekly amount to cover lunches.  If they blow their allowance on say, movies, then they either have no lunch, or have to make sandwiches from home.  For other Money Personalities, you might give them responsibility for their clothing spend.

Maybe trial this on a quarterly basis initially, otherwise you might find your teen with a lopsided wardrobe, e.g. three pairs of designer jeans, board shorts, T-shirts and numerous pairs of Calvin Kleins (you know, so the band shows just above their shorts/jeans).  But they have no budget left for winter.

Whatever it is you are giving them responsibility for, make sure you have the conversation about what their allowance includes and what it doesn’t, e.g. is sports gear included?

Now the tough, but important bit.

Along with responsibility and accountability comes consequences.  For their sake, you need to make sure they understand that if they blow the budget, the bank of Mum and Dad is closed.

If you haven’t started the savings habit with them, it isn’t too late to start.  You might help them along with some contributions to their long-term retirement fund yourselves, but you also want to teach your teen to set some goals for themselves.

These goals will be bigger and cover a longer period than for your pre-teens kids, something like their first car, their gap year, etc.  Talk to your teen about their plans to fund this goal and what you may be prepared to contribute (if anything).

This is a good stage to encourage them to find a way to generate some money for themselves.  Your Amasser teen (a Money Personality type) will be very open to this and will probably come up with all sorts of small business ventures to generate some income.  Others will be happy to find a part time job and there will be some who don’t think they should be working at all… and that is a whole different topic.

Next week we’re going look at helping your teen build a money plan – not a budget!!

BTW: you can find out what your money personality is by taking our quiz.

If you are serious about discovering ways to change your behaviour so you can reach your financial goals and build a happy and successful life, then drop us an email or click on this link to find a day and time that suits you to have a chat with us – it’s completely free!