Whether it’s their allowance or their first paycheque, learning to spend it wisely can be a source of stress or concern for some young people. For parents, finding the right time and the right way to talk about it can seem like a challenge.
But according to Sophie Miron, financial education advisor and accredited instructor for the Personal Finance: I’m in Charge program for young people ages 16 to 25, “So many young people want to talk about money! They don’t learn about it at school anymore, so they may feel lost and uncomfortable with the subject. They may lack the confidence to talk about it.”
Good habits are best developed early on. The same is true when it comes to managing money. Sophie Miron knows what she’s talking about. She teaches people about money on behalf of Carrefour jeunesse emploi (CJE) de l’Outaouais, whose mission is to improve young people’s finances.
Here are Sophie’s 5 tips for talking to your teen about money:
1. Start with what’s important to them
If you start out talking about budgets, your chat can end up feeling like a lecture. Instead, talk about things that are important to your teen, like a trip, the prom, buying a car or even just new earbuds. The point is for them to succeed and feel more confident about their abilities.
“If the conversation focuses on their own dreams and goals, it will seem more relevant to them. After that, you could talk about your own experiences and only then get into the technicalities of finances,” says Sophie.
2. Break the taboo and talk about it!
Why not start a debate around the supper table to get the discussion going?
“I start by talking to them about credit, then relate it to overspending. That opens the door to talking about everything else: saving, spending responsibly, and so on,” says Sophie.
3. Identify a tangible goal
There’s nothing like having an exciting, tangible goal to explain the importance of saving.
Ask your teen to identify something they really want that’s achievable in a reasonable period of time.
Not only will they feel proud when they succeed—the positive experience will help them grasp the concepts involved in saving money. After that, it will be easier for them to plan for something bigger.
4. Be open and acknowledge the emotional aspect
Money is often a sensitive topic for teens and parents alike. That’s why it’s important to show your teen that you’re open-minded. Don’t judge them, and keep in mind that young people need to make their own mistakes.
“That helps you keep the communication lines open and maintain some control while still giving them space,” Sophie explains.
According to Sophie, sharing your bad experiences is also healthy: “I start with the assumption that no one wants to have money issues. So young people will try to avoid tough situations if they’ve been warned about them. Concrete examples are instructive and meaningful for them. If they keep making the same mistake, try to figure out what’s behind it. For example, if your teen is addicted to buying beauty products, is it because of the influence of social media? Or are they having trouble accepting changes in their body? The idea is to understand so you can help them realize what they’re doing.”
5. Help them learn by doing
Talking about it is one thing. But walking the talk is even better!
Help your teen apply some of the math they learned in school to everyday life:
- Give them a back-to-school budget and challenge them to stick to it.
- Help them create their first budget by using the Your budget tool.
- Get them involved in the planning, budgeting and cost aspects of family decisions (trips, outings, buying a game console, etc.).
- Explain your credit card or cellphone statement to them.
- Show them the benefits of getting into the habit of saving regularly: $10 a week adds up to $520 a year plus returns!
To help your teen learn more about managing money, we have a host of resources and tips available to you. Feel free to check them out.