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The Professional Trustee Team

Developing Dollars and Sense in Teenagers

Developing dollar$ and $ense in teenagers

Over the last couple of months, I've made steady progress writing my second book called "Money 101".  Just like my first book, it's a bit of a guide, only this time is on to how to handle the green stuff opposed to Family Trusts.  What's different about this book from a lot of the other books on the shelves is it concentrates on different money topics for different ages.  For example, it helps you think about how you might teach your children about money, what you might be doing with your own money before you get married and the type of money future you might create when you are hooked up with a nearest and dearest.  It also has a section on how to survive a divorce and finally, I've devoted some pages to planning for future retirement

As I've just finished writing a bit of the book on the topic of helping Teenagers with the moo la I thought I'd give you a sneak preview…

Whilst the world has changed over the centuries, one thing remains the same; Teenagers are subject to lots of peer pressure.  Pressures to appear cool, to have the right clothes, to listen to the right music, to be seen in the right places, even to drive the right car.  When you think about it, we were subjected to the same pressures.  We all wanted to be accepted and fit in and the desire to be one of the 'cool kids' was never so high as when we were Teenagers.

But the Teens of today aren't subject to just peer pressure.  There's the pressure to have a cell phone, an iPad and iPod, and Eftpos card and even a credit card.  Yep, they face a whole lot of forces that we weren't subject to and these temptations can have the ability to really tie them up financially if they aren't handled correctly.  That's where the help and guidance of Parents come in.

$kills to be learnt

It's far too glib to say Teenagers just need to learn how to handle money.  There's a lot more to it than that.  As I see it (and in no particular order), Teens need to be able to:

  • See through the hype of advertising and brand buying;
  • Identify the cost of instant money from credit companies;
  • Distinguish betweens wants and needs;
  • Know how to shop around to stretch the dollars;
  • Be aware of the traps of hire purchase and personal loan contracts;
  • Understand the power of delayed gratification;
  • Value the secret of compounded interest;
  • Realise the dangers of using credit cards;
  • Grasp concepts of budgeting and goal setting; and
  • Be aware of pressures to spend and keep up with their friends.

Looking at this list you might think you had to learn the above so nothings different for the Teenagers of today than from the Teenagers of your generation.  Only you are forgetting one important point – credit is incredibly easy to obtain today.  Try getting credit 20 odd years ago at the age of 16.  Nowadays, credit is chucked at Teenagers. But what is borrowed has to be repaid and frequently that lesson isn't learnt until Teenagers are well and truly tied up in credit knots.

how parent$ can help

In my new book, I've taken the above list and expanded on it much more fully.  For the purposes of this article however, I need to keep things short due to space. 

Succinctly, I think Parents can help Teens by letting them see, hear and participate.  Parents need to let their kids see they are in control of their own money situations.  If Teens see unpaid bills and a 'don't care attitude' over the dollars, whatever you say will fall on deaf ears.  Let them see you have a healthy respect for money, that you know how to manage the household income, that you work towards achieving money goals such as stashing cash for something in particular, that you're a saver opposed to a spender.   Likewise, let your kids hear you openly discussing money and priorities with other family members.  If they hear this, they will get to know that having discussions about money is normal, natural, something that should be happening within a family unit. Additionally, there is nothing like doing to increase learning.  If you can involve your Teen in some of your money discussions, this will go along way to building their knowledge and skills.  It might be as simple as saying we have XXX number of dollars to hold a birthday party, lets see what things we need for the party and how far we can stretch the dollars.  The exercise can be fun as well as educational. 

Finally, encouraging and helping your Teen get a part time or summer job will be invaluable.  Now this point won't sit well with all Parents.  Often they think their Teen is so busy that they don't have time for work.  Or they want their Teen to concentrate on their schooling and not divert their attention.  But this type of thinking can do more harm than good.  Part time work is, in my opinion, vital to assisting your Teenager develop into an independent human being who does well financially later on in life.  The benefits of a part time job are numerous.  First, your Teen will acquire a work ethic being the understanding that nothing comes from doing nothing.  Secondly, earning money will instil a sense of capability and pride.  Thirdly, going to work when they don't particularly want to will help them develop a sense of self discipline. Fourthly, they will understand and appreciate the actual value of earning a dollar.  Finally, when Teenagers earn their own money it gives them an opportunity to manage those hard earned dollars.  My new book elaborates on these points and in particular, gives tips on how Teens can practice good money management.


I'm hoping the above is of help to Parents dealing with their Teens.  I know at the best of times it can be a somewhat challenging exercise akin to orchestrating and managing a military battle, dealing with a Teenager as they struggle for their own autonomy and independence.  But preserving and teaching Teenagers about money will be one of the biggest advantages a Parent can ever bestow on their child.  This is because money is something that will be present throughout a child's life and the lessons learned early on, will go along way to setting them up to having either a relatively successful financial future or not as the case may be.

If from reading this article you want to gain an understanding of your own financial affairs and future, then you might want to contact us.  We can help you identify where you are personally and put some money goals in place.  We've helped thousands of New Zealanders over the years and this in turn has assisted them in providing for and helping their own children.  Remember when it comes to money, there's only one name in the money game.  That's Gilligan Rowe & Associates.  So if you need help, call us on (09) 522 7955 for a free chat.

Until I meet you, I wish you short spendings and long earnings as the Russian Money Barons say.

Ciao.   Janet

The Professional Trustee Team
© Gilligan Rowe & Associates LP

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Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.
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