Talking Finances with Teens

Money Talk with Teens

Have you ever wondered how to teach your kids financial responsibility?  How do we prepare our kids to save for the future and to budget, without scaring them with our own problems?  Financial independence and living a debt free life is one of the key elements of happiness.  Money cannot buy happiness, but by teaching kids to be fiscally responsible, we can help them eliminate a lot of unnecessary stress once they leave home.

One way to share ideas about money and budgeting with teens, without cluing them in to our own problems, is to go on a futuristic apartment shopping excursion.  Here is how to do it.

If your 16-18 year old works part time, calculate their hourly wage into a 40 hour work week.  If your teen does not work, calculate the hourly rate for a “normal” teen job, usually minimum wage or slightly higher.  Usually this would equate, after taxes, to about $300 – $400 per week.  Teens actually believe that $300 a week is a lot of money!

Then go apartment hunting with your teen.  Make it a fun day.  Go get breakfast first and then visit several places.  Don’t do everything on-line.  Go and walk through various apartments because it will make a greater impression.  They may have very grandiose ideas about how large of an apartment a $600.00 per month rent can actually buy and they may be very unrealistic about neighborhoods at that price point.   Create a basic budget of food, utilities, internet, car or other transportation.  Show them what is possible on that salary.   Then ask them what they would do to increase their spending power in both the short and long term (get roommates to split the costs, take on a part time job in addition to their full-time job, learn how to cook rather than going out, apply to college for a long-term goal of a stable career, check out community colleges, look at trade schools).

This one exercise of apartment hunting, done well before they are ready to leave the nest, will more than likely lead to other key conversations about careers, school, expense and budget tracking, and life in general.  More than likely they will also find more appreciation in the home, clothing, food, and entertainment you provide as well.

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