In an increasingly digital world, the value of money can be a difficult concept for children to grasp. Here are some tips for helping your children and grandchildren become wealthy and wise. When you were young, do you remember standing next to mum or dad at the corner shop and watching them count out notes and coins to pay for the bread and milk? This was a valuable lesson about the purpose and value of money.
Fast forward to today few corner shops exist and the days of counting change are almost over. When our children see us pay for something at the shopping center, it’s likely to be with a piece of plastic or even by mobile phone. That’s why it’s now more crucial than ever to consciously teach your children and grandchildren about money: how to spend it and how to save it. Here are five ways to do it.
Give them pocket money
Pocket money is one of the best techniques used for how to teach kids about money and the most powerful ways to teach children the value of cash which is why it should be earned rather than given freely. Whether it’s payment for completing chores or a reward for behaving well, children will understand very quickly that money has value. You can also separate their pocket money into portions for spending and saving, so they’ll learn how to put money aside for the future.
Set up a bank account
By setting up a bank account for your child, you can teach them the basics of everyday banking. It’s worth discussing the statements with them when they arrive – not only so you can explain what each part means, but also so you can check their progress towards their savings goals and praise them as they reach each milestone. You might even open a separate savings account to help making saving fun and easy.
Make money fun
Learning about money doesn’t have to be another chore: there are plenty of games you can use to teach kids financial literacy. From a young age, you can play-act spending situations with your kids, like pretending to ‘shop’ with their toys or using food items in the kitchen.
As your children get older, these games can become more advanced. In fact, one of the best ways may be through playing Monopoly – which you can use to teach more complex concepts like rent and taxes. It’s so important to remember that what we teach our children about money when they are young, will impact on their financial future. It’s our responsibility to raise money smart kids.
A Step-By-Step Guide to Financial Literacy for Kids
Recent studies show that only 24% of Millennials demonstrate basic financial literacy skills. If your financial and personal aspirations for your kids aim higher than this, it’s right time to begin focusing on teaching kids about money so that they get benefitted in future.
Financial Literacy for Ages 3-4: Play Promotes Financial Learning
There’s a lot to learn before entering the real world, including spending, savings, banking, earning, borrowing, giving, and much more – but it’s never too late! I have all the tools and resources you need, all organized in an easy, step-by-step guide to financial literacy for kids from 3-18.
Your toddler is transitioning from infancy to early childhood. Their rapidly developing vocabulary, memory, and social skills make now an ideal time to start teaching them basic money concepts.
Introduce money with books, games, and imaginative play.
Start a coin jar to show how money accumulates.
Teach the difference between various coins and bills.
Work on counting and math with money e.g., four quarters equal a dollar.
Talk about money in appropriate contexts, such as visiting the bank or grocery shopping, and how money is earned.
Financial Literacy for Ages 5-7: Kids Love to Learn About Money
Your child’s developing their own personality and preferences, including learning styles. Play to these strengths when building their financial literacy skills.
Your kids will observe and reflect your money habits, so be agood role model.
Discuss spending considerations, such as how you make a purchase decision, e.g., using coupons or considering value.
Keep banking concepts simple e.g., how to make a bank deposit and withdrawal.
It’s time to introduce a small allowance, possibly tied to chores.
Kids are ready to make small purchases, learning how to budget through a week.
Financial Literacy for Ages 8-10: Growing Financial Skills
These are critical years for teaching the fundamentals of basic money management. Your kids possess a more in-depth understanding of money, and are still interested in learning from you.
As your kids mature, increase their allowance andspending responsibilities.
Explain the concepts of wants versus needs.
If your child runs out of money:
Consider assigning additional chores to earn extra allowance.
Review purchase decisions and money-saving tips like coupons.
Discuss free activities they can enjoy.
Encourage saving for longer-term goals, such as holiday and birthday gifts.
Earnings from small jobs inspire self-confidence, responsibility, and work ethic.
By age 10, it’s time to establish a kid-friendly bank account.
Financial Literacy for Ages 11-13: The Critical Tween Years
Changes in mood, personality, and physiology make the tween years challenging. However, increased intellectual understanding and self-awareness, plus your tween’s desire to be viewed as a young adult, make this an ideal time for broadened financial independence.
Encourage stronger budgeting by payingallowance bi-weekly.
Expand purchase responsibilities in preparation for high school.
Layer on the concept of longer-term savings, such as saving for a car or for college.
Help your tween gain banking experience, ideally using technology tools.
Teach the importance of giving to others, particularly as it relates to family values.
Allow small loans, as needed. This helps teach your tween how to get out of debt.
Financial Literacy for Ages 14-16: Money Management for Teenagers
Despite how it seems, your teen’s still watching and learning from you. Particularly given mounting peer pressure, it’s essential that you continue to be a strong role model, reinforce family and financial values, and encourage wise wealth decisions.
Peer pressure’s at its peak, so keep tabs on spending to ensure your teen stays on track, personally, academically and financially.
Allow a few ‘want’ purchases, while balancing them against budget needs.
Encourage technology to monitor spending and budget tracking e.g., Mint.com.
Consider extending a loan for a significant purchase. This helps your teen learn about loan repayments and the advantages of remaining debt-free.
Allowances should now be paid monthly, and may need modifying to reflect part-time earnings.
Allow greater autonomy, but maintain shared bank viewing.
Teach your teen how to write a check, balance their account, etc.
Consider a debit card, but don’t cave to the credit card!
Discuss how to safeguard personal data as teens are susceptible to scams.
It’s time to discuss who’s paying for a car or college, so that your teen knows what’s expected of them in terms of funding.
Financial Literacy for Ages 17-18: Money Prep Before College
A key parenting role is to ensure that your teen’s ready for true financial independence, at college and beyond. Set realistic expectations by talking together about your teen’s currentlifestyle costs relative to future earnings, and college funding.
Encourage your teen to research and apply for applicablescholarships, to help cover tuition and other college costs.
Peer pressure is finally waning, but spending is likely increasing, in line with additional purchase responsibilities like gas, car maintenance costs, cell phone bill, etc.
Require greater budget responsibilities to foster sensible financial habits.
Continue to monitor your teen’s spending and engage in conversation.
If your teen doesn’t work during the school year, a summer job can offer career insights and add to savings.
The number one problem in today’s generation and economy is the lack of financial education for kids. While most of kids grew up hearing the phrase, ‘Money does not grow on trees’, the children of today believe money flows in ATMs and that there is an endless supply available. That endless supply is the problem and also the, first reason for you to teach money sense to your child.
Yes, it is true that money does not make the world go around (And, no child should be taught otherwise). However, it is essential to teach money basics to children to empower and equip them with the knowledge, skills and confidence to build a secure future for themselves.
What parents can do
Give pocket money/allowance: Have your child use a notebook to keep track of where the money goes each month. This would be like maintaining an ‘accounts register’ which records income, expenditure and savings on a regular basis. This will help your child to be aware of his spending habits and help him manage expenses better.
Delay fulfilling their requests: Encourage your child to make a wish list. When she reviews the list a few days later, she may realize she doesn’t want some items anymore. Also, children learn to appreciate things when they have to wait for them. Teaching your child the concept of delayed gratification can help her combat the ‘Buy now, pay later’ mentality that can lead to credit card debt.
Be good role models: Never underestimate the effect your own money habits (good and bad) have on your child. Be honest about the bad financial decisions you have made, so that your child does not make the same mistakes. Avoid shopping as a leisure-time activity.
Focus on the relationship between work and money: Emphasize that you don’t get anything for free and you have to work for money. Valuing hard work will curb any sense of entitlement your child may have and make him respectful of money.
How to Teach Your Children Effective Money Management using the “GISS Method”
The Powerful “Give*Invest*Save*Spend Method” for Managing Money and Building Wealth
This method is a wonderful place to start, especially with children. Why? Because it’s simple and effective.
You may have heard the old saying “Keep It Simple.” Well, it’s true, the easier something is, the more likely it will happen, especially if it has to do with starting a new habit. The “GISS Method” helps frame the financial decision-making process thus simplifying it.
Give (10%)
This is an ancient concept often referred to as “tithing” which means “a tenth.” Giving is a very valuable concept for children to learn early on because as they begin to give to various causes, they become aware of their ability to help others and make a difference in the world. Children need to learn how to be thoughtful and kind, especially in this fast-paced world.
Invest (15%)
Investing is critical for people to ensure they will have a secure income and good lifestyle as they get older. Many people save but end up spending their savings on material items such as cars, boats etc. and not on assets that will create cash flow such as rental properties, businesses etc. Investing is an abstract concept for really young children but can be learned about gradually. Initially, this segment can be explained as the money they grow and use when they are older.
Save (25%)
It is critical that children and adults learn to set and achieve goals and that goes for the financial part of their lives as well. As a child works toward their goal, whether it’s saving for a bike or a toy of some kind, they learn the steps needed to achieve their goals. Sometimes they will redirect and change course if something isn’t working before continuing on.
Spend (50%)
This is the money for expenses if you’re an adult and basic spending money for treats and so on for children. Children are perfectly happy to watch you spend your money on the things they ask for; it’s no fault of theirs. But once a child uses their own money for purchases they begin to consider the cost and value of things.
The Bottom Line
The weekly experience of dividing your money into “Give, Invest, Save and Spend” categories is powerful for many reasons. The process is repetitive which is important for providing financial education to kids and developing new habits. It is full of memory making actions such as counting and sorting coins. The method also incorporates thinking and decision making skills when the child sets their short and long-term goals. These experiences all work together to make a memorable learning experience and create the foundation for good financial habits.
Positive parenting and positive discipline focuses on teaching good behavior and teaching money management to children using kind and firm parenting techniques. Here are some simple tips to parent positively to create a peaceful home and happy family.
Why Parents Should Use Positive Discipline
How to discipline effectively? Every parent grapples with this issue. If you have young kids, you know how every day can be a struggle if your child doesn’t behave. Even the most patient and nurturing parents can sometimes lose it when facing a defiant little human.
Consider this: A 3 year old preschooler is throwing a tantrum because Dad poured the gravy on her turkey instead of letting her do it herself. She throws up her hands, thrashing back and forth, screaming and crying for what seems like hours. Out of frustration, the Dad shouts, “Stop screaming NOW!”
Many of us are guilty of having done this more often than we’d like to admit. So how should we discipline our kids without falling into such a “Do as I say, not as I do” trap?
What Is Positive Parenting?
Positive parenting is a set of parenting techniques based on the work of Viennese psychiatrists, Alfred Adler and Rudolf Dreikurs. In recent years, Jane Nelsen Ed.D. refined and championed this method in her famous series of positive discipline books and made positive parenting techniques well known.
Positive parenting strategies emphasize the importance of mutual respect and positive instructions to discipline. Positive parenting focuses on teaching future behavior instead of punishing past misbehavior. Studies consistently show that using positive discipline yields better outcomes in terms of the child’s behavior, emotional growth, academic performance and mental health.
Positive Parenting Tips
Here’s a list of positive parenting tips and positive discipline techniques.
TIP 1: FOCUS ON THE REASONS BEHIND THE BEHAVIORS
There is always a reason why children misbehave, even though the reason may seem silly to the parents. It is reasonable for the child and that’s why they behave that way. If parents can address the cause directly, even if the child doesn’t get what they want, they would at least feel that their needs are acknowledged. Having emotional support from the family is often more important than having the actual request met. An acknowledged child can move on without the need to misbehave. They may still be grumpy, but they do not need to act out once they feel understood.
Ask questions and get to the core of the problem. Knowing the reason behind the behaviors can also help parents avoid them in the first place. For example, a child hit his brother. The reason could be that her little brother took away her toy and she was frustrated. So teaching the younger child to ask for permission before taking someone else’s things will prevent the issue from arising. Besides, it’s good manners.
If your child seems to never listen to you, there are two main possible reasons.
One reason may be because your expectation is not reasonable. Examine what you ask your child to do/not to do. Is it an order or a request with a good reason? It’s easier for a child to accept a good explanation, especially one that is related to their well-being, than to follow an order blindly. Another possible reason for disobedience is a lack of a close parent-child relationship, which forms the foundation for a child’s growth, development and future success.
TIP 2: USE KIND AND FIRM DISCIPLINE. NO NEED TO BE MEAN TO MEAN BUSINESS.
Be kind to model how to be kind and respectful to others.
Children learn by mimicking others and parents are their primary role models. When a parent yells, humiliates or calls a child names, the child learns to do the same when they’re upset. The converse is also true. When a parent is kind and respectful despite being upset, the child learns to deal with difficulties with composure and respect. Being kind also helps a child to calm down, be receptive to reasoning and more likely to cooperate.
5 Positive Parenting Techniques You Can Use in 2020
1. Get to the Root of the Behavior
Positive parenting experts worldwide can agree on this: there is always something motivating a child’s negative or disruptive behavior. So that tantrum over the blue plate? It wasn’t a random display of poor judgment – it was motivated by something intrinsically in your child. Whether that was a lack of skills in managing his big feelings, a desire to get your attention, or a power play to assert his free will – there’s always a reason for the behavior. (Even if he doesn’t realize it – and most times he doesn’t!) The thing to remember is the behavior itself is simply the symptom. Our challenge as parents is figuring out what’s really underneath that frustrating behavior.
It would make things MUCH easier if your child could simply say, “Mommy, I would really like some one-on-one attention with you when I have you all to myself. Is there a time we can do that this evening?” But we all know this is an absurd expectation. So instead, children push our buttons as a way to gain our attention, albeit negative. Because the truth is, if a child doesn’t receive our attention in positive ways, (when they don’t have to beg for or demand it) they will find ways to get any attention they can, even it’s negative.
Picture yourself as a detective. When a child begins to act out, ask yourself “What is this child trying to accomplish through his actions?” If he had the verbal skills and emotional awareness, “What would he be trying to tell me with this behavior? Once you identify the root cause of the issue, you can become a more PROACTIVE parent and preempt the outbursts from happening in the first place.
For example, imagine you have to take an important call but while you’re on the phone, your children decide it’s a great time to start a wrestling match. While still trying to sound engaged in the phone conversation, you give your kids the “if you don’t stop this right now I’m going to lose it when I’m done” look – but to no avail. You continue with the non-verbal shushing as you run from one room to the next searching for quiet, but the wrestling match seems to follow you. It’s exhausting. And by the end of the phone call you feel like you just ran 5 miles.
The goal behind that wrestling match – that just happened to start the minute you got on the phone – was most likely intended to get your attention and push your buttons. They knew you were trapped on the phone and unable to intervene, so it became the perfect time to act up, getting your attention in negative ways. Use this as a learning experience and now PROACTIVELY PREPARE for the next time you need to take a call. 20 minutes before your phone call, say to your kiddos, “Hey guys, mommy has to get on the phone in 20 minutes. Before I do that, I would LOVE to play a game with you all!”
During those 20 minutes leading up to the call, give your children undivided attention. You can give them reminders leading up to the call like “Wow! I love playing games with you. Once mommy is finished with her call, I’d love to play again!” When it comes time for the call, give your children a choice – “Mommy needs to get on her call now. Would you like to watch a show or play quietly with your legos while I’m on the phone?”
Also give them a way to “tell you something” if something they view as urgent comes up while you’re on the call. Leave a pad of paper nearby so they write or draw whatever they wanted to tell you as soon as your call is finished. Chances are that if you fill their attention buckets ahead of time and lay out clear expectations, your children will be much better behaved the next time you need to take a call.
2. Be Consistent
While parents intellectually understand the importance of consistency, the truth is, life happens – school is canceled, plans change, additions are made to the calendar last-minute. While we can’t always control life happening, it’s best to maintain consistent routines, schedules, and expectations in your home the majority of the time.
How is your morning routine? If your children are expected to make their beds, brush their teeth and get dressed before eating breakfast, then maintain this routine every day.
PRO TIP: Maintain the SAME schedule on weekends and holidays. That way, you won’t have to experience the backslide that comes on Monday morning!
Do you maintain firm technology “policies?”What happens if your kids don’t respect your family rules for technology? To be the positive parent you strive to be, it’s essential that technology rules are clearly communicated and that kids know the consequence if those rules are broken. If kids refuse or “forget” to turn off the video game when time is up, follow through each and every time with the previously discussed consequence. When parents are consistent with the rules and consequences, kids are much less likely to push the limits.
If you’re experiencing a lot of nagging and negotiating from your child because of inconsistency in the past, you can end it with 3 simple words, and get back on track.
3. Say No to Rewards
Parents who are unfamiliar with positive parenting techniques are often surprised when I discourage them from using rewards. After all, rewards sound positive, but the truth is they do more harm than good and can lead to a major dose of entitlement down the road.
Parenting is a marathon, not a sprint. When making discipline decisions for your kids, it’s important to keep your long-term goals in mind. Rewards are ineffective because they only offer short-term gain.
Think about it..maybe today you rewarded your child with a cookie for behaving well in the grocery store, but what will she expect next time? At least one cookie, right? Maybe even two?Will a similar reward be expected during the next doctor’s office visit or trip to the mall?
Or perhaps you bribed your picky eater to eat their vegetables by offering ice cream for dessert? Now that he knows vegetables can be sold for the price of ice cream, it only makes sense he would hold out on eating his greens until he’s offered ice cream or another equally appealing sweet reward.
Using rewards as a bargaining chip for the desired behavior is a slippery slope to an attitude of entitlement.
4. Focus on what you can control – YOURSELF
Oh my friends, this one is tough, especially in the heat of the moment. But, if you remember that there’s always a REASON for the behavior AND your children have free will, then you can begin to respond appropriately.
After all, there is a level of emotional freedom that is found when parents realize “I can’t always control my kids, but I can control my responses.”
Sure, some parents might be able to scare their kids into behaving properly or threaten punishment to achieve a short-sighted goal, but at the end of the day – each child will grow into an adult who has full control over their life decisions.
So instead of overpowering children, or bribing, or shaming them into making good decisions, I encourage parents to reframe their perception of the child. Instead of thinking of him as a misbehaving child, view him as a little person who simply hasn’t been equipped with the right tools to behave appropriately in a given situation. By doing this, parents will be better prepared to handle the misbehaviors.
One way parents can control their responses is to decide what you’re willing to do AHEAD OF TIME. This works great for getting kids to take on responsibilities they’re perfectly capable of or you nag them about, but they normally just don’t do – emptying backpacks or lunchboxes, putting laundry in the hamper, cleaning up toys, etc.
Let’s use lunchboxes as an example.
Start by deciding what you’re willing to do, and what age-appropriate responsibility needs to be on your kids’ shoulders.
In a calm moment, reveal in advance, “I’m happy to make you a lunch every morning for school, as long as your lunchbox has been emptied out, and it’s on the shelf in the pantry or on the counter. If the lunchboxes are clean and in their place, I’m happy to make your lunch. If it’s not cleaned out or not in its place, it’ll be up to you to make your own lunch.”
Then ask, “Is there anything you’d like to do to help yourself remember to unload your lunchbox and put it in the pantry?” (He might want to make a sign in pictures or words to remind himself since you will not be reminding.)
5. Discipline, Don’t Punish
One of the biggest differentiators between positive parenting techniques and other parenting methods is the focus on discipline over punishment. Discipline means “to train by instruction and exercise” while punish means “to inflict a penalty for (an offense, fault, etc.)” or “to handle severely or roughly.” Experts say that paying a small amount, however infrequently, can help in providing financial education to kids
By teaching our children the appropriate ways to behave without using blame, shame and pain forms of punishment, we equip and empower them to be competent and capable young adults. When you are considering a response to an offense – just like with rewards – think long-term.
Parents, financial literacy is a way of life, and while teachers integrate some key money concepts into the various math and humanities curriculums (bravo, by the way, for this effort in the education system) it’s not up to them to make your kids financially savvy. It’s a team effort.
I get it. You’re stretched for time. You might not feel like you’re a shining example of good financial choices. And the pandemic has shifted your priorities. But having regular, positive and simple conversations about money can go a long way toward empowering your kids and teens to make smart financial choices when the time comes. It will also give them a head start in the classroom when their teachers teach this subject in the fall.
Here are three simple principles you can share with your kids and teens. And obviously, you’ll want to integrate age-appropriate examples.
Saving early has major advantages
Who doesn’t want the freedom to do what they want, right? Well, having savings allows for that flexibility.
Young people have the most important ingredient in saving success: time.
The earlier your kid or teen starts saving, the greater the time their money has to benefit from the power of compounding. It works like this. Money earns interest and returns, which are reinvested into the original amount. Then that larger sum earns interest and returns. Repeat.
It’s like a snowball rolling down a hill of fresh snow. It picks up more snow as it rolls and, by the time it hits the bottom, that once tiny snowball is much larger than the original size. The longer the hill, or time, the greater that snowball will grow.
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All your child has to do to benefit from the time value of money is start saving.
Thus, the best thing you can do with this money principle is instill the habit of saving small regular amounts early on; even a small amount like $1 per day or $5 per week. And, if you really want their eyes to light up, plug their savings into a compound interest calculator online so they can see just how huge their money will grow.
The savings habit is what’s most important. How the money gets invested is bonus material for when your child is a teen and is ready to go with you to meet your financial adviser.
It’s OK to spend within your means
Kids and teens need to know that it’s OK, and normal, to spend money on what matters to them. This helps to form positive money psychology, rather than approaching spending from a place of scarcity and fear.
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The money principle underpinning this is to spend what you have and nothing more.
It can be extremely effective to focus on the benefits of planning out spending — a.k.a. budgeting — and how good it feels to be able to afford their purchases. The most basic of a budget for a young person has three parts:
Saving — 20 per cent
Spending — 70 per cent
Giving — 10 per cent
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The older your kid, the further they can break their budget down. For example, if they are heading off to college they will need to incorporate spending categories for meals and books. This level of basic budgeting is reinforced in most provincial curriculums.
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By the time your child is a teen they will have a basic understanding of debt. For obvious reasons you will want to steer them away from ever carrying a credit card balance, which is bad debt; but this is your opportunity to make clear to them that not all debt is bad. Specifically, they need to know that it’s OK to take on student loans to fund formal education so that they can have better future income opportunities. In fact, it’s one of the best investments they can make: education. Certainly, paying it back will feel a bit burdensome, but statistics continue to show that the payoff far outweighs the cost of the student loans.
This money principle can be extended further; good debt (mortgages, for example) helps build up assets. Bad debt (credit card balances and car loans, for example) has a near-zero payoff. So use good debt when you need it and avoid bad debt.
For teaching kids about money, these three money principles need to be a way of life and not just a one-and-done conversation. My advice is to talk about them often, demonstrate them, learn more about them, help your kids with their financial homework (when school resumes) and have some fun in the process.
It’s a sticky subject in the best of times. These days, it’s downright scary, as the pandemic rages and the economy tanks.
Many parents are generally reluctant to talk about how to teach kids about money, says Thomas Henske, a certified financial planner and partner at Lenox Advisors in New York. However, now is an especially good time to teach your kids some basic financial info and allay their fears.
Experts say it’s easier than you think to teach your kids about money, whether you start chatting with them about it or turn to some engaging books.
Questions from kids like, “How much money do we have?” or “Are we rich?” could make some people uncomfortable, but they are great conversation starters, Henske says. And they don’t have to be directly answered if you don’t want to.
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Try answering with questions of your own, such as “What do you mean by rich?” or “How much money do we need?”
Henske didn’t feel ready to reveal his net worth when his children asked about it, so he turned the exchange into a conversation about what they thought the figure was — “They gave horrendous answers,” he said — along with the value of their house and their mortgage.
Here are six dos and don’ts to help your kids, no matter their age, learn about money.
1. Talk about it
Not discussing money is like not discussing sex, Henske says. Just as most parents have some kind of conversation about intimacy so their kids go out into the world prepared, he recommends talking about money openly, too.
“We still treat personal finance and money as a kind of taboo,” said Liz Gendreau, 40, who blogs about family finance on her website, Chief Mom Officer. Gendreau has three sons, ages 16, 12 and 5.
By the time kids are in their teens, parents can talk about college costs or buying a car.
“They benefit from learning how to budget,” said Gendreau, who lives in Hartford County, Connecticut. “The more you can educate your kids through real-life examples, even things you wish you’d done differently, the better.”
2. ‘No’ is an option
“Parents sometimes sacrifice too much for their kids,” Gendreau said.
It’s a mistake to give kids everything, especially if it comes at the cost of saving for a parent’s own retirement, says Gendreau. Whether it’s expensive college tuition or a lot of after-school activities, parents should balance their own financial needs with those of their kids.
“It may not be something they want to hear, but you have to make choices with your money,” Gendreau said.
People commonly confuse loving with giving. The amount of time you spend with someone is more meaningful. “That is finite, and it’s the ultimate currency,” Henske said.
A pandemic bonus: Canceled programs and plans give you an opportunity to show your kids what together time really means.
3. Teach the basics
What’s credit, what’s debt and what’s the difference?
“It’s really important to sit down with your kids if they’re still young or even have a conversation with a young adult, and really teach them about the dangers of using credit cards,” said Brad Klontz, author of “Mind Over Money” and co-founder of the Financial Psychology Institute.
People don’t understand how credit works — “You’re actually taking a loan from a bank at a very high interest rate,” Klontz said — or how misuse can spark financial disaster. In fact, three out of five Americans say their credit has been harmed by the pandemic, and about three-quarters worry about paying their bills and making good on loans.
Debit cards work on money that is yours. When you use the card, you’re subtracting money from your own account.
Kids who don’t understand how credit works can face financial disaster when they first sign up for a card, which may be in college, Henske says.
4. Make them wait
Young kids need to learn the difference between a need and a want.
Teach them strategies and have discussions around how much they want something to avoid tantrums when you say no to a purchase.
When Henske’s kids were small, he used to have them put things on a list, a strategy he recommends starting at age 5 or 6.
Older kids can write down what they want in a notebook. Younger kids can, with your help, print out a picture online of the desired object.
Two days later, they may find they no longer want it, Henske says.
5. Include them in big purchases
Kids should be part of the conversation when a family buys a car or plans a vacation, Henske says. Otherwise, that’s a lost opportunity to teach them the value of a dollar, since they rarely understand how much big things cost.
The experience will come in handy when they need to make informed decisions about choosing a college or thinking about careers. “They don’t understand the income and lifestyle that a specific income affords you,” Henske said.
Don’t forget another facet of buying: arguing for refunds.
The pandemic has created a chance to let kids see how you negotiate for a refund on plane tickets for a canceled trip.
6. Don’t pay for everything
Always let kids contribute something financially.
High school students might pay for their car insurance. A teenager who wants an expensive iPhone might pay for the data service portion of the bill. “It doesn’t have to be an unworkable amount,” Henske said.
Teens are less likely than ever to get an after-school job. In fact, a 2019 report by the Pew Research Center found that only 35% of teens get summer jobs (and even fewer get jobs during the school year).
That’s not to say today’s teens are lazier than ever. There can be lots of challenges that complicate traditional employment for teens.
Lack of transportation, being too young to get a job, or lack of job opportunities are just a few of the reasons some teens struggle to find work. But, if your teen still wants to earn money, starting a business may be an option.
Surveys show the vast majority of young people want to own a business someday. Thanks to TV shows like the Shark Tank, becoming an entrepreneur has become a big dream for many teenagers and young adults.
The good news is, your teen can start a small business at any age. And there are many small businesses that cost very little to launch.
Here are a few businesses that almost any teen could start with little to no cost:
1. Web Site Designing
Teens often take their computer skills for granted because they’ve grown up surrounded by technology. Not only do most of them take classes that enhance their computer skills, but most teens spend a lot of time playing on computers.
Even without advanced training, many teens have computer skills far beyond the skills of the average adult. Teens who understand the basics of website design can earn money creating basic websites for small businesses. There are lots of web design programs that make building websites a fairly simple process for technology-savvy teens.
2. Babysitting
With typically low pay but huge responsibility, babysitting is a common part-time and summer job for young workers. Teens should learn basic first aid and possess skills working with children. Teens who receive high recommendations from parents are likely to be in high demand, which can allow them to increase their pay.
3. Creating and Selling Crafts
From yarn bracelets to homemade soap, teens can earn a handsome paycheck manufacturing and selling crafts. Crafts can be sold in a variety of places, from online auction sites to local stores. A teen who finds success selling homemade items may earn a chance to sell those products to retail stores.
4. Lawn Service
Lawn mowing is another common job for teen workers but some treat their lawn mowing services as a real business. They acquire many customers and offer a variety of services. Some teens starting lawn mowing businesses have grown these start-ups into full-time careers.
Landscaping, tree grooming, and other basic lawn services can be combined with lawn mowing. Any teen wanting to start a lawn mowing service should be dependable, however, so that customers can count on getting their lawn taken care of according to their needs.
5. Reselling
A teen who is good at bargain shopping may find success buying and reselling items. Plenty of people earn a decent living by shopping at their local thrift stores and then selling the items on auction sites, like eBay.
Clearly, your teen will need a little start-up money to purchase the initial items. And as with any business, there’s some risk involved because the items may not sell for more money. But, it can be a wonderful learning opportunity for a teen.
6. Seasonal Jobs
For some teens, a seasonal business will work best. A teen who is too busy during the school year to commit to employment may do best with a summer business for example.
Other teens may be busy with family vacations, sports camps, and recreational activities during the summer and may only be able to manage a business during the winter.
Seasonal businesses can include anything from gardening to snow shoveling.
7. Blogging
Blogging isn’t an easy way to make money, but many people have created highly successful blogs that allow them to earn a lot of money with advertising space.
Similarly, popular YouTube videos can help people earn money. But, your teen should understand that it isn’t an easy way to get rich, and it can take a lot of work to get a blog started.
8. Graphic Designing
Artistic teens may be able to earn some decent money through graphic design. The internet has opened up possibilities for any aged artist to create and sell drawings, logos. Teens can use various software programs to create images and there are many websites where teens can advertise their creations and offer their services.
Kids who seemed confident throughout childhood may struggle to maintain self-assurance during the teen years. For many, adolescence is filled with self-doubt, a questionable body image, and insecurity.
The good news is, you can take steps to help your teen build self-esteem. Here are eight strategies that will instill life-long confidence in your teen.
Promote Self-Improvement
Teens who struggle to master a skill may conclude they’re complete failures. A teen who has difficulty with math may decide they’re not smart. Or a teen who fails to make the soccer team may decide they’ll never be good at sports.
Show your teen that it’s possible to accept flaws while also striving to become better. There is a healthy balance between self-acceptance and self-improvement. Rather than label themselves as “stupid,” help your teen see that while they’re struggling academically, they can still strive to become better.
Praise Effort Instead of Outcome
Rather than praise your teen for getting a good grade on an exam, praise them for all the studying they did. Instead of saying, “Great job scoring those five points in the game,” say, “All that practicing you’ve been doing has been paying off.” Show them that it’s important to try hard and it’s OK if they don’t succeed all the time.
Your teen can control their effort but they can’t always control the outcome. It’s important to acknowledge their energy and effort so they don’t think they are only worthy of praise when they succeed.
Teach Assertiveness Skills
Teens need to know how to speak up for themselves in an appropriate manner. An assertive teen will be able to ask for help when they don’t understand school work, rather than allow themselves to fall behind.
A teen who can speak up is also less likely to be treated poorly by peers. They’ll speak up for themselves when they don’t like how they’re being treated, and they’ll be able to ask for what they need in a direct manner.
Encourage Your Teen to Explore New Opportunities
Trying new activities like focusing on financial education for kids, discovering hidden talents, and challenging themselves can help grow teens’ confidence. But many teens are afraid of failure and don’t want to embarrass themselves.
Encourage your teen to join a new club, play a musical instrument, engage in volunteer work, or find a part-time job. Mastering new skills will help them feel better about themselves.
Model Confidence
Your teen will learn the most about confidence based on what you do—not what you say. If you’re guilty of making critical statements about your body or your abilities, you’ll teach your child to do the same.
Role model how to face new situations with courage and confidence and demonstrate the importance of loving yourself. Talk to your teen about times when you’ve been brave or things you’ve done in your life to help build your confidence.
Build Self-Worth on a Healthy Foundation
If your teen only feels good when they get a certain amount of likes on social media or when fit into a certain size pair of pants, they’ll struggle to maintain confidence when situations don’t suit their needs. Basing self-worth on superficial things, external circumstances, or other people leads to a lack of confidence in the long run.
Help your teen build a healthy and stable foundation for self-worth. Emphasize your values and teach that true self-worth is about living according to those values. For example, help them see that it’s more important to be kind and caring rather than thin or attractive.
Balance Freedom with Guidance
Micromanaging your teen’s choices will only reinforce that they can’t be trusted to make good decisions independently. It’s important to balance just the right amount of freedom with plenty of guidance.
Provide your teen with plenty of opportunities to practice the skills you’ve taught. Let them experience natural consequences and they’ll learn from their own mistakes. Over time, they’ll develop increased confidence in their ability to make healthy choices.
Help Develop Positive Self-Talk
Your teen’s inner monologue will play a major role in how they feels about themselves. If they are always thinking things like, “I’m so ugly,” or “No one likes me,” they’re bound to feel bad about themselves.
Teach your teen to develop healthy self-talk. Point out how many thoughts aren’t true and help them see how being overly harsh can be detrimental. Teach her to reframe irrational thoughts like, “I’m going to fail because I’m stupid,” with something more realistic like, “I can pass math class if I work hard.”
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Tim Connolly 