The teen years are a transformational time. It鈥檚 when your kids take their first steps toward adulthood. Every parent鈥檚 hope is for their kids to start the journey not only with a head full of dreams and ambitions, but also equipped with key life skills and good habits: doing the laundry, basic cooking, and so on.
One of the most important is solid .
Allowances and birthday money can help younger kids learn about saving and spending. As kids get into their teen years, money management becomes even more significant. Here are a few tips on how to start money conversations and what to talk about.
How to start the money conversation
Try making the connection between good financial habits and achieving their hopes and dreams. Want to take regular trips or buy a car? They鈥檒l need to save up.
Using the word 鈥渉abits鈥� is important. It helps communicate to your teen that finance will become a valuable and routine part of their life.
Focus on the basics
Opening a bank account
Your first bank account is a big deal. It鈥檚 up there with getting your driver鈥檚 license as one of the first steps into adulthood. A bank account frees them from asking you for money and from relying on cash in their pocket.
A debit card also makes teenagers think about money in a different way. It鈥檚 not as tangible as cash so they鈥檒l have to get into the habit of checking their account online to track their money.
When it comes to choosing the right account, involve your teen in the process. Get information from a or sit down with them to look at bank account options online. Discuss the benefits of the account, how it keeps money safe and accessible, how it can help money grow. Outline what they also need to watch out for, like charges on the account. A is a great place to start looking for you teenager鈥檚 account.
Paying yourself first
Once your teen has an account in their name, it鈥檚 the perfect time to talk about managing money. Teach the concept of 鈥溾�� (saving automatically) and saving money for short- and long-term goals. Keep it relatable and talk about things like buying their first car, concert tickets or clothes.
Explain how automatically saving a set amount from every pay cheque will make it easier to get the things they want. This helps you transition into a chat about budgeting.
Creating a basic budget
It鈥檚 important to stress that a budget isn鈥檛 just about managing and controlling your spending, but also about ensuring you鈥檙e saving enough for your goals.
Consider working with your teen to set up a simple budget spreadsheet that documents how much money they will be earning and how much they might need to pay for things. This helps teens understand the idea of income and expenses, and the need to track their spending. Unlike when you were their age, your teens have options like apps or this Government of Canada for help with budgeting.
Make this the first conversation of many
This can all be quite a lot for a teen to absorb. Consider leaving concepts like taxes, investing, risk and debt for another day. There鈥檚 always time to sit down for another chat about such an important topic.
to find out more about good financial habits for teens.