As a parent, it’s easy to get lost in all the expenses of having a teen, whether that means opening your own wallet for uniforms and college applications or encouraging your kid work after school to earn an iPad and pay for gas. All too often, though, parents gloss over money talks (or skip them altogether), and teens are left without any info on how to wisely handle all those $20 bills.
Here, experts explain the biggest money mistakes parents of teens make, and how to remedy them quickly.
Mistake #1: Putting off money talks. Children as young as 3 can understand basic money concepts like waiting to make purchases and choosing wisely whether to spend or save, says Beth Kobliner, author of Get a Financial Life. If you didn’t introduce financial concepts in the toddler years, don’t stress out, she says—but do get to it. Have the same basic conversations, but just adjust the vocabulary to meet your teen's understanding.
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Use what’s happening in your teenager’s life as a launching point for money talks. When prom approaches, create a budget together, have your teen research costs for a dress, tickets and any other expenses. If college is on the horizon, discuss tuition, book costs, and room and board openly. If your kid's just landed a job, get her set up on a site like Mint.com or with a free app to track what she's earning and outline how she'd like to spend it.
How else can you jump in?
1. Be open about the family expenses, from groceries to electrical bills. Teens will benefit from knowing real costs of living independently.
2. Institute a mandatory wait-time before any big purchases. Discuss the costs, along with pros and cons, and then revisit it all two weeks later to stretch critical thinking skills (and dollars).
3. Tell your kids about a financial misstep you made. Explain how you remedied (or are working on) the situation.
4. Most importantly, start talking money now. And don’t let the conversation end.