By Mat Anderson
THE JOPLIN GLOBE (JOPLIN, Mo.)
JOPLIN, Mo.
May 07, 2008 10:10 am
—
I was thrilled when I got my first “real job” as a teen. In truth, I was more thrilled about the money I would be making than the work I would be doing.
When I received my first paycheck for $88, I couldn’t have been more excited. I spent my day at work thinking of all the things I could do with the money. I could buy some CDs, take a girl on a date, buy some new clothes — the possibilities were endless! In reality, the possibilities ended about four days later when my $88 was gone and I couldn’t even remember what I had spent it on.
My story isn’t much different from that of many teens today. According to MarketResearch.com, American teens have a buying power of more than $190 billion. That’s more than the gross domestic product of Russia! This is money that many teens do not pay toward rent, car payments or utilities. It is disposable income and they do a great job of disposing of it.
This is because many teens do not have the necessary skills to manage their finances. In a recent survey, more than 6,000 high-school seniors were asked basic questions about saving, borrowing and investing and they answered over half of the questions wrong.
This is a generation that has more money to spend than any generation before them and, as a result, they develop spending patterns at a younger age. Their attitudes about money are influenced by several factors, including the media, peers and personal experience. But according to the National Council on Economic Education, parents exert the most influence on teens’ ability to make sound financial decisions. Teens need to see their parents practice sound money management. This means saving, budgeting and making rational decisions about purchases.
The Americans for Consumer Education and Competition suggests the following tips to help improve your teen’s financial fitness:
Start financial education early by giving your child a weekly allowance.
Discuss the difference between needs, such as school supplies, and wants, such as a new video game.
Discuss family financial matters (family budget, routine shopping, purchase of a new car or home, planning a vacation, paying for college, etc.) with your teen.
Discuss options with your teen when he or she receives a monetary gift (saving, investing, giving to charity, etc.).
Incorporate media (newspaper articles, television, etc.) as a tool to educate your child about financial matters.
Work with your teen to develop a realistic budget. Set financial goals and plans for achieving them.
Promote shopping around before making purchases. This step generally assures a better deal and discourages impulse buying.
Use financial (checking account, credit card, etc.) statement reviews as a teaching aid to evaluate spending habits, promote sound financial practices to instill fraud review practices.
Stress the importance of safeguarding personal data, such as Social Security, personal identification (PIN) numbers and credit-card information, as a means of preventing identity theft.
Foster charitable giving by urging your teen to donate a percentage of his or her allowance or wages to your family’s place of worship or an organization of his or her choice.
Now that I’m an adult, I look back on my teen years and wish that I had some of the same money-management skills then that I have today. By teaching your teen and, most importantly, by setting an example of financial responsibility, you can help them develop skills that will not only allow them to make the best choices for today but that will serve them for the rest of their lives.
Mat Anderson writes for The Joplin (Mo.) Globe.
Copyright © 1999-2008 cnhi, inc.