It seems obvious that teens should learn about money. However, financial education for teens is sorely lacking. Many high schools offer little or no assistance in helping teens learn about money. While some parents make this a priority, others don’t focus on it at all. It might help both parents and educators to understand exactly why everyone should learn about money in their teen years. Here are four big reasons:
1. Their brains are primed for habit development
There are a few periods in our lives when brain development is at its richest. The teen years are a key period. What your teens learn about money at this time in their lives is going to follow them for years to come. It’s the perfect time for teens to learn the financial habits that they are going to need for the rest of their lives. Learning and practicing budgeting, saving, earning, and investing now can serve them for a lifetime.
2. Teens are ready for independence
One of the main psychological goals for teens is gaining independence from their parents. Money offers independence. Learning about handling some of their own finances now can help ease them into financial independence. It’s a great time to do it because the risks are minimal. Once they hit college and are out on their own with access to credit card applications and student loans, they can make big financial mistakes. Practicing small bits of financial independence now helps them prepare for responsibility when that time comes.
As a teen, you don’t have a lot of financial responsibility. Moreover, you can’t get access to a lot of money. You’re working with small amounts so that the mistakes you make are minimal. The lessons you’ll gain as you practice are invaluable. Parents who want to help their teens learn about money can offer them some independence with finances while still providing guidance and a support system to fall back on. If you do this in their teens, you are less likely to find yourself providing that support into their twenties and thirties.
3. Investing now will have huge returns
Teens who learn about money are able to start investing it right now. With the help of parents, they can start to set up savings accounts and plan for the future. If you put even a small amount of money into a high-interest savings account, then let it grow for the next forty years, you’re going to end up with a huge sum of cash. It’s far better than if you wait to start investing when you’re in your thirties or forties. Teens who make extra money from part-time jobs can easily set themselves up for a great financial future.
4. They’re already learning, for better or worse
Teens are already learning about money, whether the education is intentional or subconscious. Teens pick up on their parents’ habits and belief systems about money. They are influenced by how their peers handle money. Media affects how they understand money. For better or worse, they are taking in a whole lot of money messages already. If we don’t focus on offering smart, practical financial education to teens, then they may easily develop bad habits that could take years to undo.