Money Lessons for Teenagers and Kids: Helping Them Achieve Financial Literacy

Only 16% of high schools require a personal finance class for students before graduating. So, teaching successful money management is squarely on the parents’ shoulders. However, that’s not a bad thing. You know your kids best, and that’s part of the secret sauce to help teach your kids about money.

Teaching your kids about money does not need to be a formal task. There are daily opportunities to discuss money with them. Just be on the lookout for teachable moments (which definitely never means opportunities to scold or shame).

Successful mentoring in this area of life includes talking about more than dollars and cents. It involves discussing big-picture ideas like generosity and self-control. The time you spend exploring concepts of money management will pay huge dividends for the rest of their lives.

Here are three ways to successfully teach your kids about money:

1. Identify problem areas.

Everyone approaches money in a way that makes sense to him or her. That leads some kids (and parents) to struggle in one area when it comes to money.

We recommend every child understand his or her Money Personalities. There is a scientific, confidential online assessment made just for kids aged 5-18 to determine their natural bent towards money management. Identifying their strengths and weaknesses now – before credit cards, student loans, and Amazon Prime – is priceless So, figure that out.

The main areas to focus on with your child are the 3 S’s: save, spend, and share. If you teach them how to get their arms around each of these, they’ll be giant leaps ahead of most kids and adults when they leave home.

At our house, our middle daughter, Kambry, is a Spender. She doesn’t save. It truly is like money burns a hole in her pocket. She would rather buy 20 items at the Dollar Tree than save the $20 and get a nicer toy from Target. Saving doesn’t come naturally to her, but that’s ok! I’m a Spender too.

When you begin to help a child who is a Spender we recommend discussing a “Spending Plan”, not a savings plan. Talk to them about their increased ability to spend in the future if they’ll do some saving now. Make it all about spending not saving.

Make sure your spouse knows about the problem areas you’re working on so you can both help teach your kids about money.

2. Check in with them regularly.

Research shows a concept taught in multiple settings over time seems to stick with a student longer than dumping all of the information on them in one sitting. Teaching your child about money is no different.

Share a concept with your child and then give them opportunities to put that into practice. After a while, circle back around to discuss their progress and any challenges.

Megan and I have encouraged our kids to share their money with others since they were little. We thought we were doing well on giving until two weeks ago.

We have taught them to put aside money to share with others every time they get paid. Well, we sat down with the kids to check in on their sharing and were quite surprised.

To our delight, they had set aside a generous amount of money to share, but they forgot to actually give it away. Ha! Guess we didn’t quite get that lesson completed. Still, we were glad that they made sharing with others a priority. Now for the fun part, giving it away.

Check-in with each child to get a handle on what is tripping them up. For example, some kids love to save so much that they are scared to spend. Talk them through the benefits of spending. You don’t want them to go through life afraid to use their resources. Money isn’t worth anxiety.

Each child will learn at a different rate of speed and will need help with unique aspects of money management. Work together with your spouse to help them out.

3. Stand by your “no”.

If you say, “No”, feel the confidence to stick with it. When you tell your child “no” or “not this time” you have a good reason for it. Stand by that.

Kids don’t love being told “no” (neither do adults), but they need to know you mean it. It shows them they can trust your word AND they don’t need or get everything. Plus it reduces the chance of them begging for something. If you haven’t caved in the past, they will assume you won’t start that today.

You are teaching your child a good life lesson. Getting them used to “no” isn’t just a financial lesson. Their teachers, coaches, friends, bosses, etc. will tell them “no”. You can help them learn to deal with that disappointment now. Avoid the pull and push of waffling on your decisions.

We know you’re busy. Most parents are busier than ever today, but please take the time to teach your child about saving, spending, and sharing. Help teach your kids about money, show them how they’re wired to approach money, and reinforce the benefits of their unique outlook.

To get more tips on money & parenting check out the section on our website dedicated to the world’s most difficult (and rewarding) job.

Taylor and Megan Kovar

The Money Couple