Money can be a sensitive topic to discuss with your kids, as it’s considered a personal matter in old-fashioned households.
That said, to better prepare your children for the future in a highly globalized world, it’s time to start financial literacy discussions at home. In becoming a responsible teenager, it is necessary that your children learn how to manage their personal finances, which include the basics of budgeting, saving, and investing.
Understanding teenagers
The “been there, done that” mindset most parents have supposedly provides foresight into how teenagers think. But times are constantly changing, so your comprehension of your child’s experience can only reach a certain extent.
The ages of 14 to 16 play a crucial phase in the development of teenagers as young adults. At this point, their experience of handling money is limited to spending it as consumers. As parents, it is part of your role to educate them on financial literacy, enabling them to better navigate money matters as they grow older.
A teenager’s primary source of information about handling money comes from informal discussions in their social circles. They tend to follow trends set about by their peers. As such, you need to check in regularly and guide them throughout their journey into becoming responsible young adults.
Here are three key takeaways for teenagers to understand financial literacy:
- Teenagers should learn how to balance their needs, wants, and values related to money, as peer pressure or the desire to fit in can influence their decision-making.
- Teenagers should learn how to manage their basic expenses, such as allocating their allowances and savings for food, clothes, and gadgets.
- Teenagers should start thinking about their future and openly discuss financial topics with their parents, such as saving up for college, working towards their ambitions, and becoming mindful of their financial expectations.
Activities for parents and their teenagers
As a parent, here are eight activities that you can do to encourage your teenager to budget.
Talk about peer pressure.
Teenagers tend to compare themselves to their peers. Peer pressure can creep in and influence their decision-making without them knowing it.
While most teenagers tend to challenge the authority of their elders, it is important that they remain open to you in discussing unfamiliar territory.
Listen to your teenagers and talk to them in adult terms. By setting good and realistic examples in financial management, you can find what resonates with them.
Transition more financial responsibilities
By delegating certain spending decisions to your teenagers, they feel in full control of their money. For example, if your kid wants to purchase a certain brand of soap, shampoo, or facial wash for their skincare routine, give them a budget to work with.
Reevaluate their allowances.
Some parents give their kids daily, weekly, or monthly allowances. As they become teenagers, you can practice giving them their allowance every month, making sure that it is enough to cover their basic needs, with just enough wiggle room to enjoy a fun purchase or put into their savings.
Foster a mindset that a portion of their allowance and cash gifts goes into a big purchase in the future. This monthly disbursement of funds enables them to plan and budget for the next 30 days (about 4 and a half weeks) while having a saving mindset.
Consider allowing part-time employment or volunteer work.
As teenagers, they become legally allowed to work part-time gigs or participate in volunteer activities. Apart from enjoying some amount of extra income, it empowers your teenager to understand the value of working and earning money, while learning to balance schoolwork, social life, and other extracurricular activities.
Discuss saving for their college education.
It is necessary for teenagers to understand that going to college can open better opportunities for them overall. While they may get impressed by popular dropout success stories, it helps to ground their expectations on the belief that in life, there are exceptions to the rule.
Saving for short-term wishes like clothes and collectibles can serve as a starting point, but gradually build their saving mindset into targeting long-term goals, such as a car, travel, or college education.
Co-monitor their savings for more autonomy.
As your kids grow into teenagers, it is about time that you provide them with access to a savings account connected to a debit card, like Metrobank’s Sparks Savings. By enrolling your child in Metrobank Online, they can get 24/7 access to their account and conveniently check it anytime, anywhere. This allows your teenager to monitor and manage their account online, enabling them to have a more personal experience with their money.
You can start teaching your kids how to be independent by allowing them to tap into their savings account as they please. You can also discuss banking basics with your teenager.
Practice insightful giving.
Some high schools require their students to do community service. While it may seem like extra work to a teenager, contextualizing giving back to the community can help them think more maturely about their privileges. Talk to your teenager about values formation, helping others, and carrying themselves with good moral character.
Demonstrate healthy financial practices and spending habits.
As the adage goes, “healthy habits start at home.” As parents, you must show your teenagers that financial literacy is crucial to their success as adults. Teenagers look up to their parents as role models, so be mindful of how you discuss and manage money matters, from budgeting to saving to investing your finances.
Talking to your teenager about savings and insurance can help them understand that budgeting can prepare them to manage their finances in the real world, even if they are still years away from full-fledged adulthood.
Preparing your teenagers for the future
With the Metrobank Spark Savings, you can equip your teenager with a debit card that can give them glimpses of responsibility as they grow into a young adult. Having a debit card teaches them about being more responsible with their finances. It gives them access to more money but also means that they do not spend it all at once.
Set up your teenager for a secure future by imparting basic financial management skills, like budgeting and saving. Opening a savings account is just one of many steps you can take to help them become responsible teenagers.
Open a Metrobank Spark Savings account for your teenager and get started on a meaningful financial journey with your child today.
