Your teenagers and their money

Where do teenagers learn about money? Are you, as a parent or guardian, responsible for their perceptions and attitudes towards it? Last Saturday, we invited a few teenagers between the ages of 13 and 17 to tell us, as part of our research for a new programme we are organising. There was no format to it – we let their thoughts flow free. Although they came from different schools and education systems, turns out that they had a lot in common when it came to money.

Here’s what we found out.

They observe you. You may not have had a formal talk with them about money, but they observe almost everything you do – and will probably do exactly that at some point. One said she could tell her mother does not manage money well because of her messy wallet holding all sorts of receipts, bank deposit slips and so forth.

Another indicator was the state of her bank statements, which indicated to the teenager that her mother was never quite sure how much money was in her bank account. Sometimes it’s as simple as facial expressions: One teenager remembered the look of shock on their parent’s face after an ATM issued a receipt; clearly the balance indicated on it was unexpected. The lesson here is that your kids are watching you and learning.

Television shows are influences.  The entertainment your child chooses is not harmless in shaping their perceptions about money. Reality shows such as Keeping Up With The Kardashians and The Rich Kids of Beverly Hills show people acquiring money simply so that they can buy flashy things. What can you do about that? Tell them the truth. We found something as simple as telling them that the Kardashians don’t pay for most of the stuff we see them with on TV actually helped.

Money kills relationships. Teens believe that having a lot of money is synonymous with not spending time with family and friends. Yes, parents need to work hard to take their children to good schools and keep them entertained over the holidays, but this has a more negative effect on them than you not being able to afford all these things. The excess gadgets, toys and pocket money don’t mean that much to them.

Some of them expressed fears about money controlling them. This comes from the belief that a lot of money is made in dishonest deals and that you will be held hostage to doing these deals. Sometimes it’s a simple observation between how the rich uncle is treated, but the other uncle who doesn’t have too much money is treated a different way.

Money has a good side. Teens recognised that money can give you a good life and allow you to help others and yourself. Reinforce this by speaking to your kids about the right things people do with money. Obviously, you have to be able to use yourself as an example. Some teenagers revealed that their parents allow them to listen in on business and money conversations.

These seem to help, but you need to explain the context of the discussion, and break down heavy financial/business jargon.

Incentives work for teenagers. They don’t mind earning money for various tasks, but they need an incentive. One said she earns money for good grades, which is a great incentive for her to work hard in school. You can also use items of clothing that your teenager wants, such as new soccer shoes, to inspire your teenager to save. If they are old enough, give them a long-term goal – like buying a car once they go to college. The lesson here? Don’t just give them things all the time. Inculcate the discipline of working in order to reap a benefit at the end of the day.

Saving is hard. Most teens store their savings in a cupboard, their sock drawer, under their mattress and so forth. Sometimes they forget where they put their money, and sometimes other people – such as their siblings and even their parents – help themselves to their stash. If your child has some money saved, don’t ruin it by dipping into it. Consider introducing them to a bank account that they run. This will be an important step for them when it comes to bank relations.

At the end of the day, teens understand that money is important; all they want is for someone to dedicate some time to teaching them how it works. Consider doing this for your child – especially before they enter university and have to learn to manage their own funds the hard way.