Teaching teens to manage money is an important part of bringing kids to maturity. Money issues are prominent and permanent life issues, and giving teens a good foundation in and understanding of money will help them throughout their entire lives. Everything from allowances to spending habits can be formed during the teen years; make sure that teens are prepared for adulthood by teaching them good financial habits when they are young.
Should Teens Get an Allowance?
Allowances are one of the biggest issues for many teens and parents where money is concerned. Teens often want an allowance so that they have easy pocket cash for shopping, gas or coffee, while parents want to help ensure that their kids are getting a good understanding of how to handle money.
A good compromise for teens and allowances is to offer an allowance in exchange for housework, chores, babysitting or other tasks. Earning money on a regular basis is a good incentive for teens, and teaches them how to be responsible with their behavior.
Simply giving teens money can encourage a lazy mindset and attitude towards money by making it seem like money is readily available without putting in labor first. Set a specific amount of money that can be earned by a teen and help him to reach his financial goals while helping out around the house.
Teens and Summer Jobs
Another easy way to help teens start earning money and understanding what it takes to have money is to ensure that they apply for and work at a summer job. Summer jobs can be as simple as a neighborhood lawn mowing service or as complex as an internship in a field that interests them.
Get teens involved in the labor force; a summer job is an excellent way for teens to appreciate the money they earn and learn important life skills in the process. Working during the school year can be challenging for many teens, but those who are able to handle academics and a job should be encouraged to do so in order to foster greater financial independence.
How Teens Shop
Shopping with teens can be frustrating for adults. Many teens want to spend their money quickly and on many items, which can be a huge blow to a savings account or credit card. Teach kids how to save for big-ticket or expensive items that they really want instead of buying it as soon as they can afford it.
Go shopping with teens and learn their shopping habits. Some teens are spenders, while others are savers. Encourage teens to find a balance between pleasure and responsibility that will allow them to enjoy the money they make without over-spending. Teens who can begin their own checking and savings accounts can begin working towards creating their own college fund.
Teens and Credit Cards
Many credit card companies require a parent to be on the account of a credit card, but do allow teens to have them. In addition, online banking services like PayPal offer money cards for teens that are linked to their PayPal account; this allows teens to spend their money using a card without the fees and bills of credit cards.
Debit cards linked to a checking account can also be used to teach teens how to handle their finances. Attaching overdraft protection to a checking account can also act as a safety net in case of overdrawing money. Teens who learn about money at a young age are less likely to require overdraft protection, although it can be useful for individuals of any age.
Teens who are responsible enough to handle their paychecks and allowances should be entrusted to handle a checking account and savings account. Many banks offer student accounts for teens, and these can be linked to a parent’s account, or viewed by a parent, to ensure that the teen is spending within her financial limits.
Instill a sense of financial responsibility for teens by modeling the expected behavior. Balance checking accounts, pay bills on time and spend within the financial means available. Teens learn largely through observation, and a teen who observes parents exhibiting financially responsible behaviors will emulate them. Teach kids good money sense early on to help them throughout the rest of their lives.
Teens may respond to a scientific approach that explains the detrimental effect that alcohol can have upon the young and maturing brain.
It may be possible to reason with teens by talking to them about how the brain works, an approach that may work for teens with a scientific aptitude. The American Association for the Advancement of Science (AAAS) recommends that adults appeal to the teenage fascination with the brain. According to a statement in a press release, teens are fascinated with the way the brain works, and that fascination can be used to explain the effects of alcohol on the brain.
The AAAS recommends that parents, caregivers and teachers use the teenage fascination with the brain to begin a discussion of why they should not drink alcohol.
Shirley Malcom, head of the Education & Human Resources Directorate at AAAS, stated, “Parents need every tool they can find to convince their teens not to drink alcohol, particularly during the holiday season. Science is such a tool, and it is providing new insights on alcohol’s effects on the maturing brain.”
Alcohol Affects Young Brain
It used to be believed that the human brain is finished developing before adolescence is reached, but new research shows that is not true. According the AAAS ongoing brain research shows that important brain development takes place well into a person’s twenties. The important brain regions and their interconnections develop into early adulthood.
The brain consists of over 100 billion neurons, each of which makes tens of thousands of connections. Alcohol damages and kills neurons and perhaps alter developing parts of the adolescent brain that are still forming.
Alcohol Effects on Teens
Research suggests that alcohol can cause teens to: make bad decisions, develop a tolerance for alcohol and drink more over time, take risks that they could not otherwise tackle, impair their memories and cause problems with medications.
• Teens who drink alcohol are prone to making bad decisions because the prefrontal cortex, involved in decision making and planning, does not mature until the teen years are past. Alcohol can harm a teenager’s ability to reason and weigh consequences of his actions.
• Teens who drink alcohol may suffer from memory impairment.
• Teens who drink alcohol may develop a tolerance, causing them to drink more over time. Tolerance can lead to alcohol abuse and dependence. The highest rates of abuse and dependence on alcohol have been reported in young people in their late teens and early twenties. Young teenagers, from 12 – 17 follow closely after.
• Teens who drink may take risks that they would usually avoid. Risk taking behavior may be a result of damage to brain connections while they are maturing.
• Teens who drink alcohol can harm their memories because the area of the brain that stores memory, the hippocampus, is still developing during the teen years.
• Teens who drink alcohol may have problems with their medications, such as medicine for ADD, bipolar disorder and other medications. Reactions between alcohol and medicine can impair judgment, thinking and motor skills.