How to Raise Teens into Financially Literate Adults

How to Raise Teens into Financially Literate Adults

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How financially literate is your teenager at home? Like many parents, I believe that it’s important to consider the financial future of America’s teens. It’s hard enough for most adults to understand their own finances – imagine how much harder it is for teenagers.

The reality is that America’s complex financial system isn’t all that easy to grasp. My peers and clients can attest to this fact. Without professional help, it can be easy for details to fall through the cracks, whether in terms of savings, budgeting, taxation, or investments. And if teens don’t start off with a good financial education, it’s not going to be easy for them to navigate these key areas of finance later in life.

That being said, I believe that there’s hope for the youth yet, especially since America’s teens are finding a renewed interest in financial literacy. In a survey involving 1,004 teens, 45% said that they aren’t getting enough financial literacy education at school.

Meanwhile, at a virtual summit on youth concerns, one 13-year-old asked an insightful question which I believe highlights the most important aspects of this issue. “Why do students have to learn so many things in math that they can never apply to the real world? Instead, shouldn’t we be learning more things that focus on financial literacy?” asked Kallin Marquez, an 8th grader at Arizona’s Diamond Canyon Middle School.

Despite what these reveals about modern schools, I can’t help but see this growing interest in financial education as a step in the right direction for the next generation. In the modern business landscape, it’s no secret that financial literacy is a strong advantage.

Today, those pursuing business administration careers as financial managers are highly in-demand across different industries. In fact, this profession is expected to grow significantly over the next decade. Apart from banks and insurance companies, virtually every company or organization needs financial managers and experts. And the training for this in-demand expertise begins with early financial literacy.

How Can You Raise Your Teens to be Financially Literate Adults?

At least it seems that America’s teenagers are on the right track. But you can’t take a breather just yet. As a parent, you play a large role in helping them stay the course. Remember that these are your child’s formative years. And much of what they learn at this crucial stage in their lives can carry over well into adulthood. If you have one or more teens at home, how can you raise them to become financially literate adults?

#1: Leverage Online Educational Resources for Teens

One thing I’ve learned working for families is that teenagers love spending time online. And you can try using this to your advantage. Nowadays, there’s no shortage of online resources that can help your teen get their financial bearings. If they have a smartphone, then they already have everything they need to access these digital resources. This can open the door for teens to help and educate themselves at their own pace. This is crucial for ensuring the long-term efficacy of your attempts to improve your teen’s long-term financial literacy.

I believe that self-study is one of the best methods for acquiring new knowledge or skills, and this includes financial acumen. If your teen can spend hours upon hours on different apps and games on their phones, I don’t doubt that they can do the same on an app that helps them with their finances. Developed by banks and independent financial technology companies, today’s teen-focused online finance apps offer different opportunities for kids and teens to learn about financial literacy. You should also be on the lookout for local online financial literacy courses or workshops aimed at younger audiences.

#2: Work with a Financial Advisor

Though I may be biased, I believe working with a fiduciary financial advisor is one of the most effective ways to improve financial literacy. When you understand your own financial picture and the factors that impact your financial success, you can have more meaningful conversations with your teens about their money habits and decisions. Plus, you can involve them by bringing them to some of your meetings and letting them see first-hand what financial planning and management looks like.

If you don’t currently work with an advisor, we recommend a variety of educational resources that can help guide you through these conversations. In addition, many communities offer free financial literacy workshops and resources for their residents. A simple Google search can point you in the right direction.

#3: Lead by Example

With help from a financial advisor, you can better lead by example and show your teen how to put financial literacy into action. There are many ways to start doing this. Set a limit on how much your family eats out or gets food delivered each week. Do your best to spend only on things that really matter, such as healthy groceries or vital house repairs. Don’t take on any unnecessary debt. Instead of splurging on a new phone or widescreen smart TV, consider putting that money into your teen’s college plan.

These simple and smart habits can go a long way towards achieving real financial growth. And if your teens see that you’re being smart about money, they can be more inclined to do the same. Don’t keep your teens in the dark about your finances. Let them know why you need to save, and explain why you’re making these changes. Get them involved in your long-term financial goals and decisions as a family. This may even pave the way for teens to also start saving money and exploring opportunities for wise investments in the near future.

Raising teens into financially literate adults may sound intimidating, but it doesn’t need to be. Just remember that financial education begins at home. If you find a system that works for you and follow some of these tips, you’ll be doing your teens a service for years to come. As always, don’t hesitate to  if we can help.

Written by Reese Jones exclusively for Align Financial

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Tanya Nichols, CFP®
Tanya Nichols is a fee-based CERTIFIED FINANCIAL PLANNER™ professional located in Duluth, MN and serving clients across the country. Align Financial takes a simple but deeply impactful approach to wealth management, connecting your money to your life in a way that feels right to you.

Because Align Financial is independent of Raymond James, the expressed written opinions above are our own and not necessarily reflective of Raymond James’ opinions. Read our full disclosure here.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and CFP® in the U.S.