Financial Education for the Family: Teenagers

Kids in general like money, and kids ages nine to 12 are no exception. They start to realize the power of money and what it can buy for them in the future. You can have key conversations with kids about money at this age, including the following:

• The dangers of online shopping: In addition to savings conversations, you can open up a conversation with kids about online shopping. Talk about how online spending makes it hard to visualize what you buy because you don't use real money — you use PayPal or a credit card. Always encourage kids to ask first before they buy something online.
• Help with in-store shopping: When you shop, ask kids to help you compare prices. Generic brands can help you save money.
• Consider alternatives: Talk about alternatives that can save money, such as borrowing a book from the library instead of buying it.

Financial Conversations to Have with Kids 13 to 15

Teens can understand a lot of sophisticated conversations about money, and it's time to start introducing some even more complex conversations.

• Talk about delayed gratification. Instead of opting for buying something now, make sure you talk through learning how to wait and save instead of having to have it now.
• Talk about peer pressure. Kids at this age also really want what their friends have, such as new gadgets or new clothing. Encourage them not to cave in to peer pressure so they can make their own individual decisions about money.
• Explain investing. Yes, now. Show kids a compound interest chart and show them that they'll end up millionaires if they start investing money in the stock market now. It's a powerful lesson that only you will teach your kids. Schools don't tackle this at all.

Financial Conversations to Have with Kids 16 to 18

Naturally, one of the most important things to talk about with older teens involves the costs of college. College costs, from tuition to fees for books, costs a lot of money, and you can start having those conversations right away in high school.

• College loans: You must talk about loans and what it means for your long-term finances. Students should understand that they must pay back loans. Help them visualize how much loans cost by using an online calculator to summarize payments at graduation compared to their potential income (based on their potential major). They may even want to get started saving for college on their own once they realize how much it might cost.
• Credit card debt: Talk to your kids about the dangers of credit card debt before college. Credit card offers will start to come to your child — maybe even during college — and it could entrap them for life. Talk to them about what credit card debt means and how interest builds if they don't pay off their credit card each month. Explain how much responsibility a credit card entails and why they need to remain really careful about debt.
• Insurance: Explain how necessary insurance is, from health insurance to life insurance to an emergency fund. Your teen should always prepare for the unexpected, from a flat tire to a major health emergency.

Don't be afraid to talk about any mistakes you made with credit with your older teen. These conversations might not be any fun at all but they can help your teen avoid the same mistakes you've made in the past.

This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.