Top 10 Most Important Things Parents Can Do to Raise Teens with Great Money Skills

  1. Have your teen set a financial freedom goal that sounds something like, “I will have $X by age X that will allow me to be completely financially free so I can have _________, be ______________,  do _____________, and help _____________  without financial worries or constraints.”
  2. Teach your teen the habit of tracking his/her money.  Use Mint.com or an Excel spreadsheet or a handwritten journal.  Set a schedule for updating all assets and liabilities and follow it.
  3. Support your teen to experience and explore opportunities to learn about money online, in books, and in programs.  Check out WealthQuest for Teens’ online video/workbook program that is narrated by and for teens.
  4. Teach your teen to manage his or her money so that spending, saving, investing, donating, and earning are coordinated to happen at the same time.
  5. Teach your teen positive, healthy ideas about money that are not rooted in fear or myth.  For example, “money allows people to express who they are; it doesn’t make them a particular way or change them.”
  6. Talk to your teen about your finances.  Make money an interesting conversation topic.
  7. Make sure your teen is accountable for his or her money.  Your teen should have financial responsibilities and experience natural consequences for poor money management.
  8. Make sure your teen has at least one active bank account that has a meaningful role in his or her life.
  9. Have your teen routinely give 10% of all the money he or she receives to a cause he or she cares about.  Check out www.dosomething.org for opportunities and ideas.
  10.  Encourage your teen to earn money in creative and productive ways.

© WealthQuest for Teens, Ltd., 2011 All rights reserved worldwide.

Checklist for parents raising teens with great money habits and attitudes

√  Practice:  Does your teen employ a system of money management that has their money lined up with their current needs, wants, future goals, and commitment to the greater good of humanity?

√  Talk:  Does your teen talk about money with people who can teach them about it?  Do you talk about money at the dinner table and in the car?

√  Learn:  Does your teen engage in lots of experiences where they get to explore money—reading books, watching DVDs, doing online video programs, surfing the web?

√  Give:  Does your teen give 10% of all of their earnings and gifts to a cause that matters to them?

Reader challenge: Can you check off each item on this list?  If not, try tackling a new item each week!

© WealthQuest for Teens, Ltd., 2011 All rights reserved worldwide.

Top 10 Tips for Effective Financial Parenting

This week we are featuring family wealth/financial parenting experts Jayne Pearl and Richard Morris.  Together, they help families navigate through the dysfunction that comes with having wealth.  Part of this process entails teaching families how to analyze and understand their money values, something every family should do!

They offer the following 10 Tips for Effective Financial Parenting:

Teach Skills

1. Base allowance not just on age or survey averages, but on financial responsibility—a combination of discretionary (wants) and nondiscretionary (needs).
2. Help your children identify goals (that are meaningful to them, and that are age appropriate and reachable in relatively short periods of time) that they can save up for.
3. Make sure your children understand how to use credit cards responsibly (charging only what they can pay in full each month, what it costs over time if they do carry a balance, how their actions affect their credit scores, and how their credit scores impact their ability to get a job, rent an apartment, and what they will pay for auto insurance).
4. Help your children become resilient by letting them make mistakes without your bailing them out, so they can feel the consequences and learn problem-solving skills that will help them avoid making the same mistakes.

Promote Values

5. Provide incentives for your kids to save instead of forcing them to save (challenge or matching grants, for instance).
6. Look for opportunities to help your children learn how to delay gratification (those who do have much lower rates of problem behaviors such as drug use, alcoholism, teen pregnancy and dropping out of high school, and score an average of 210 points higher on their SATs).
7. Find ways, if you have more than one child, for them to work together: for instance, challenging them find ways to cut back on household expenses (with rewards of a percent of the saving, perhaps), making decisions about charitable giving together, investing a chunk of money that the family will use in several years for a special vacation, or joining a family investment club.
8. Help your children develop a healthy skepticism about advertisements by watching television with them and pointing out deceptive ad tactics (small print scrolling quickly across the screen, fast-talking announcers listing negative disclosures, and camera tricks), and recalling things they or you saw advertised that you purchased only to be disappointed that it was not as good as the ad led you to believe.

Provide Open Dialogue

9. Share stories about your own experiences with money as a child (what you got for allowance, how you spent or saved it, mistakes you made), and as an adult (such as how you learned about financial management such as balancing a checkbook).
10. Make money a topic of discussions at the dinner table: what lessons you have learned from the “Great Recession,” mistakes you have made with money, misconceptions you had grown up with, and what your smartest financial moves have been.

For more information about Jayne and Richard’s work, visit their web site:   http://www.kidswealthandconsequences.com/.

© copyright 2011 Jayne A. Pearl and Richard A. Morris www.kidswealthandconsequences.com

The Importance of Goals

“The method of the enterprising is to plan with audacity, and execute with vigor; to sketch out a map of possibilities; and then to treat them as probabilities.”

Christian Nestell Bovee

Learning to think about and manage money is exactly like learning to think about and reach ANY goal in life.  It requires the same steps, the same mental process, the same elements (vision, commitment, resourcefulness, tracking progress, organization, making a game plan, etc.).

When I talk to my students about goal-setting for grades in English class, I notice lots of signs of boredom!  Kids have heard it over and over.  BUT, when I talk about goal-setting for money, suddenly, everyone is listening and participating.

College, wealth, health, grades, career, great relationships…all of these are important areas of life.  Let’s make sure that the teens in our lives are dreaming BIG dreams, believing in themselves, committing to their game plan, and taking small and big steps to fulfill their dreams.

Take a look at these steps that you can follow to have a successful “goal-setting” conversation with your teen.

© WealthQuest for Teens, Ltd., 2011 All rights reserved worldwide.

12/16/11 ~ This Week’s Roundup

This week’s roundup is a mix of sites and articles that I came across this week.  I realize that some may not be directly related to the topic of teen financial literacy, but I feel that they are important to the cause because the key to being able to talk to your child is to know how to be around them, to understand who they are, and to know how to be their support system.  I hope you find this list useful.

Takin’ it To the Streets.  Sharon Lechter points out that talking to your teen about Occupy Wall Street is a great way to start a conversation about what matters to them and to get their gears spinning.

Tips for Taming Teenage Stress.  Is your teen stressed out?  Lori Lite shares some great tips for taming stress and being there for your teen.

Social Skills for Kids.  Jean Tracy shares a thoughtful interview she conducted with a teenager about making friends.  These are ideas that we should all try to follow in our lives!

10 Steps I’m Taking to Become a Millionaire.  Jon the Saver shares his own step-by-step process that he has begun to follow in hopes of becoming a millionaire.  Some tips are ones that even your teens can follow!

© WealthQuest for Teens, Ltd., 2011 All rights reserved worldwide.