Teens and money: Seven damaging mistakes parents make
What lessons are you teaching your teenage children about money? Discover seven damaging mistakes you want to avoid.
Parents mean well, really they do. But what with keeping their teens alive, fed and out of trouble, on top of juggling the elusive work-life balance, they don’t have much bandwidth leftover for painstakingly teaching their teen how to handle money smartly and make better money decisions.
Add to that, the fact that most parents don’t have formal training in the subject of money and so aren’t fully aware of their own lack of knowledge, and the fact that teenagers today are spending more money than any generation before them, and you’ve got an explosive cocktail of circumstances.
One that doesn’t bode well for parents or teens.
So let’s take a quick look at the most damaging mistakes parents unwittingly make when it comes to teaching their teens about money.
1) Thinking they’ll learn about money at school
Most parents delude themselves into thinking that schools teach this. But they don’t. And in the few instances they do, the content and delivery is so somnific that it has the detrimental effect of turning teens off this crucial subject for good.
2) Assuming teens will work it out themselves
Some parents mistakenly assume that their children will figure this out on their own. And their kids might, but they learn slowly and painfully, by making expensive mistakes that cost them valuable time and money.
3) Not getting started early enough
Most parents don’t realise how much of an impact getting an early start will make to their teens’ future financial success.
An early start enables their teen to harness the immense power of compounding interest and has the added benefit of giving their teen more time to practice and internalise the knowledge.
4) Thinking an allowance or app teaches them how money works
Many parents assume that giving their teens an allowance, debit/credit cards or making them download a budgeting app will teach them how money works.
These really only work effectively once teens have had a financial education and understand how to make smarter money decisions.
5) Making them read Rich Dad, Poor Dad
Some parents erroneously believe that by making their teen read Rich Dad, Poor Dad or watch a few videos on the topic of money will give them a deep understanding of how to manage money smartly.
Understanding how money works and being financially astute is much more nuanced than this. It requires a holistic approach that takes into account financial knowledge, financial behaviour and financial mindset.
6) Boring teens with financial lectures
Too many parents bore their teens by constantly lecturing them about money. Cue the anatomically defying teen eye-rolls.
Teens mentally switch off when parents get into lecture mode, effectively making it ‘white noise’ when they speak.
Or they make it overly complicated and/or un-relatable to their teens’ present circumstances, with the damaging result that teens lose interest quickly and often permanently.
7) Not believing their children can be wealthy
Some parents don’t believe it’s possible for their teen to learn how to become wealthy. This is most damning because it unintentionally sets the bar so low.
Parents don’t realise that being smart about money is a teachable skill, one that is easily learned and most importantly, one that will deliver stratospheric returns.
Mistakes are an undeniable fact of life. It is the response to error that counts. — Nikki Giovanni
Marilyn is founder of KFI Global, an education provider which aims to teach teenagers how to make smarter money decisions and equip them with the knowledge and skills for a secure financial future.
Often families shy away from talking about money, but Marilyn is on a mission to challenge that norm and make teaching financial literacy a priority.
Marilyn’s new book, Smarter, Richer, Braver, is an essential manual for parents, revealing the importance of teaching teenagers how to manage money effectively and improve their financial literacy from an early age.
Photo by Alexander Mils