Conversations around personal finances with children used to feel taboo until experts said it's vital for them to learn basic financial skills. Today, a growing number of parents are having money talks with their kids. But most of them face one major challenge- heated conversations or money fights.
Let's face it. When you combine teenagers, cash, and something they want, you can get a recipe for a situation. And the stakes are even higher for families that rarely hold financial talks. The conversation can easily get out of hand.
In most cases, money conversations begin when a teenager wants something that parents think it's not worth buying. But financial experts warn that this approach might not be the best.
If you want to talk with your teen about money without losing your cool, here are six tips to keep in mind.
Listen More, Talk Less
Allow your teen to speak without interruption. If you keep interrupting they tend to get bored or angry. And while at it, prepare for anything.
It is not uncommon for kids to try and convince you to get them what they want. But that doesn't mean you have to pay for it. If it's not worth it, simply tell them you think they should not spend money on it. But give them room to go ahead using their own money, if they have any.
Allow Them To Pay
Let your kids pay for something you're not willing to. This will help them develop some skin in the game. For example, they will find a creative way to earn the money to buy it.
It will also teach your teen the value of working for something. In the long run, they will understand the relationship between the cost of things and the number of hours worked.
Teenagers tend to get frustrated when they lack an explanation for not getting something they want. So be as open as possible. Perhaps the best place to start is by letting them know the family budget.
This will help them understand why they can't spend $2,000 on a trip because you had planned for something else. Real examples could be what you need to tame the heat.
Give Them Money To Manage
If you've not given your teen some money to manage, it may be wise to start. Let them be responsible for meals or athletic equipment at school. You can even put them in charge of gifts or clothing for siblings on holidays or birthdays.
Just tell them how much they can spend and allow them to choose the gifts. Once they have mastered it, give them more freedom and more responsibilities with minimal supervision.
Let Them Make Mistakes
Everyone learns from mistakes, and your kids are no exception. Even after doing their due diligence, they may still spend money on the wrong things. If that happens, don't scare them.
Studies show that it makes sense to let teens make mistakes a little bit. They may remember that feeling when making bigger purchases in the future.
Some parents, for instance, say once they set the amount of money to spend on meals, their kids will have to pack lunch for school if they blow their budget.
Find A Mentor
Some teens don't like to heed advice from their parents. Rather than arguing for weeks, find a mentor to guide them. This doesn't mean looking for expensive financial planners. It could be a family friend, a successful local businessman, or any other expert in the field.
Talking with your teen about money can be challenging. However, it will help them develop great financial skills. Use these tips to prevent the discussion from turning into heated augments and don't forget to share your experiences and hopefully more tips with us. Good luck!