Finances from a teen perspective
I’ll admit it has been quite a while since I was a teen, and it’s requiring some effort to view the whole issue of finances from a teen perspective. However, since financial education directed towards teens seems to be a very neglected area, I wanted to try and create a halfway financial meeting place for teens and their parents, and hopefully offer food for thought for all.
Regardless of our stage in life we tend to view things from our own perspective and generally have a hard time sincerely empathizing with a different approach. And that’s true of pretty much most things, finances included. Teenagers see and need things in the ‘here and now’. Adults, in theory, view things longer term. So what happens when teens and adults meet on the financial court?
Obviously every family has its own dynamics and financial attitude, aptitude and unique financial circumstances. But there are some general questions and issues that everyone needs to think about. First batch of questions are directed to the teenagers; parents’ questions follow after. (Seeing as it is unlikely that your teen/grandteen will be reading this article, you might want to share the questions with them as a conversational starting point.)
- When everything, or almost everything, is paid for by your parent(s) – is that good or bad? Obviously on the superficial level it’s great for you, but spend a moment thinking about the deeper ramifications.
- What do you think you can learn from your parent(s), relatives or friends about finances (banking, consumerism, investing etc)?
- If you haven’t already done so, when do you think is the best time to learn the basics about financial management?
- Who do you think should pay for your leisure activities? Your driver’s license, your post-high school education?
- Until what age do you think you deserve an allowance?
- Have you ever enjoyed purchasing something that you paid for with your own hard-earned money?
Ok, teenagers’ questionnaire is over, now the focus is on the parents/grandparents.
- How much financial responsibility do your children show? Or to phrase it more accurately and acutely, how have you educated your children to be financially responsible?
- Have you ever contemplated how your financial education (or lack thereof) has impacted your ability to reach your goals in life?
- Considering that your children may grow up in a different financial system than you were raised in, do you have the tools to teach them the essentials that they need to succeed?
- While supporting our kids for longer and longer is necessary in many situations, are we ultimately doing them a service or a disservice? Are we, the parents, guilty of being enablers, depriving our children of crucial education and tools to become financially aware and responsible individuals?
- There are always going to be material needs that nearly every parent will want to buy for their children, that will vary depending on the situation and the family. But who pays for the things that you don’t consider ‘vital’?
Like I said, food for thought.
But if we follow the premise that education is almost always a good thing, I would say there’s just one simple equation that needs to be absorbed by all:
Revenue > expenses = stability
And that pretty much says it all. If you can consistently prioritize your spending so that you are always spending less than you are earning, you will give yourself the opportunity to ensure long term financial success and stability.
I haven’t offered you a groundbreaking, innovative thought – just the basic foundation to your financial stability.
Boring and unadventurous? Maybe.
So where do you go now? What do you do with the above equation? Your choice entirely.
Regardless of your age or stage in life, that is your key to financial stability. It might mean you have to prioritize your purchases, ignore your impulse to buy. You may have to learn new consumer habits. But you will be setting yourself up for life.
So, if you are a teen reading this, use this article as a guide to ensure you are heading in the right financial direction. And if you are a parent, consider your children’s education. You invest so much in teaching them a wide variety of subjects, why isn’t financial awareness among those subjects? It’ll possibly turn out to be one of the best investments you have ever made.