As much as the teens in your life may appear to have everything under control, recent research we’ve done shows young people need more help with money management than they’d have you believe.
Transitioning from school leaver to fully fledged adult is rife with new experiences. Some are milestones like moving out of home, starting university, or finding a full time job. Others are part and parcel of finding your way like eating cereal for every meal, or learning the important difference between the hot and cold cycles on a washing machine.
Our conversations with young people have identified 4 common mindsets that you can keep in mind when talking to teens in your life about being good with money.
Failure is not an option
When you’re just starting out as an adult the idea of failure doesn’t tend to dwell on your mind as much as when you’re middle aged with a mortgage and kids. Fearlessness is one of the greatest things about being young but it can also foster a false sense of security and be problematic when it comes to establishing realistic savings plans.
Talking point: Chat with them about money management. Start with the basics like working out where money goes by getting them to look at their income and expenses. Saving can be tough on a limited income but helping them work out a budget will highlight what they might be able to put away for a rainy day. Investing in knowledge now means risks taken in the future become more calculated and less of a gamble. Get more basics on money management here.
Need the best of everything
Everyone wants ‘the best’ that life has to offer, but with age comes an increased awareness of need versus want. Starting out on your own often means suddenly downgrading your lifestyle as your income is hit by the real costs of living. Our research suggests recent school leavers worry about this a lot and aren’t sure how to get help with everyday money management.
Talking point: Take time to chat about the cost of living with teens before they leave the nest. Break it down, bill by bill – it might be old-hat to you, but it’s all new for those just starting out on their own. Calculate their share of the costs of running your household. It’s bound to be a reality check for teens who haven’t been involved in household budgeting before.
Life should be easy
Sometimes life is hard. Understand that your ‘stay the course’ endurance mentality is not something your kids necessarily have in common with you so don’t give the spiel about walking 5 miles in the snow to get to school. Younger people are more likely to revise their options and change course when facing obstacles. While this can result in great ‘outside the box’ thinking, it can make the concept of saving seem futile.
Talking point: Help teens set realistic savings goals and give them the tools to succeed. Looking at how savings can grow over time can be really inspiring. Use a savings goal calculator to help teens visualise what their savings will look like after a year or two.
Good grades are the be all and end all
End-of-year exams are underway so much of your focus will be on supporting your studying teens. Young people will be focussed on their exams and then the results but success as an adult is also about learning things that you probably won’t find in the curriculum so make time to talk about life beyond the books.
Talking point: Familiarise your teens with how banking works and take them through all their options. Set up a meeting with a banking advisor in-store, or get information on banking for those who are starting out here.
Communication is key
Leaving school and moving out of home can seem daunting, but setting up good money management habits is a good way to kick off the journey to adulthood. You can’t control what your teen does as an adult, but you can give them the tools they need to succeed.
Talk openly about money and how to be good with it. Start the conversation before they leave, and keep it going after they’ve gone.
If you’re a real life honest to goodness teenager (thanks for reading this far), we’d love to hear from you. Are we on point here, or way off the mark? Leave us a note in the comments and let us know what you think.