Paycheck Chronicles

Teenagers and Money: Why Actions Speak Louder Than Words


“Do as I say, not as I do.” I’m sure you’ve heard that phrase. And if you’re anything like my wife and I, you’ve lived it…at least a little bit. Well, here’s a blinding flash of the obvious: it doesn’t work. Sure, words are powerful, buy actions can morph into long term habits. Repetition is a powerful teacher. At this point, I could use my golf game to illustrate, but I’ll spare you that tale of woe.

Money is a different matter, but my wife and I tried to use the hands-on approach with our kids in a quest to build their financial acumen while they were growing up. Of course, our goal was to equip them with the financial skills they would need to succeed on their own. It hasn’t been a totally smooth transition (they now range in age from 18-26), but there have been some big wins over the years...unlike with my golf game.

Here are three ideas we used to bridge the gap between words and action with our teens.

Learning To Budget

Wanna go out with your friends? Better check your bank account. Think that new shirt for red day at school is a must? Better check your bank account.

We still covered food, clothing and shelter, but any extras came out of our teens' allowance or work. The result? That bag of candy doesn't taste quite as sweet when it puts an outing with their friends in jeopardy. I still remember my daughter scowling when we told her a trip to the movies or one shopping expedition or another was coming out of her wallet. Oh well, economic decisions can be difficult. But the result is that today they understand the concept of spending less than they earn, that’s a win.

Being A Smart Consumer

The truth is, impulse buys, lack of research, bad timing and human nature have all led Team Montanaro down the path to bad purchases at one time or another. But we want our kids to do better. Not to date myself, but my research used to begin and end with catalog browsing. Today, our kids are doing a great job comparison shopping, evaluating reviews and checking prices before making any big purchase. Since they had to save up to make any major purchases (no credit for them!) it gave them time to confirm that their purchases make sense. While it may be detrimental for the U.S. economy, we figure more smart consumers is a good thing.

Paying Yourself First

My kids can't even fathom what a powerful weapon this is in the quest to build financial security, but we continue to work hard to get them to understand it. When they were teens, we set up savings accounts for them. To encourage them to save, we matched any money they put in the account. Grandma's $10 check for Halloween magically morphs into $20 with a simple decision to save. Granted, the "return" they earned on their decision was ridiculously high, and they couldn’t immediately tap the account. But, we were trying to teach them a lesson here and needed to get their attention. I'm not sure they've fully grasped my discussion of employer-matching contributions, but we're still working on this one.

So, there you have it. By no means are those the only lessons our kids needed to be successful, but I'm certain they will look back and feel like they benefited from a little hands-on training with Mom and Dad.

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