Are you saavy at teen finance? Take the money smart teen quiz to find out. How do you rank? Are you a Pro, a Pee Wee or somewhere in between?
Money Smart Kids
If you are a parent, the quiz may be a great way to start talking finances with your son or daughter or to help your teens earn money.
Giving teens the opportunity to be part of their money management can be a positive and rewarding experience for teens.
In any of the money smart kids discussions you may have, remember to distinguish between needs vs wants. Both can be good but understanding the difference between the two is critical to teens and money. Here are some examples to review:
- Nutritious food
- A place to live
- Clothing to wear...like a warm winter coat
- Transportation to and from work or school
- Designer jeans
- Junk food
- Video games
- Cell phone
Of course everyone's situation will be different. For example, if you have a job where you are on call...like a doctor...a cell phone will be a need.
There is nothing wrong with having a few wants, just remember to set a teen budget so that you can plan for them.
The decisions made as a young adolescent will largely affect future finance dealings. Time flies and before you know it teens will be leaving the house to go out on their own. Are they already practicing good teenagers money management skills?
Now is the time to start making kids and finance work well together. Develop good personal finance money management habits now.
Kids and Finance Practice
I thought an article I read recently from Money magazine December 2009 issue on how to teach teen finance skills was very useful. I have included a portion of that article here.
"Your teen tells you she must have everything on her list. Easy for her to say. “Most kids have no concept of how much things really cost,” says financial behavior researcher Ted Klontz. Make it clear that Mom and Dad--unlike Santa--have finite resources. Tell your teens how much you plan to spend on them; then ask them to research the prices of the things on their lists and prioritize their wants based on the budget. If the top pick exceeds your limit, offer to let the child make up the difference, either by doing extra chores or chipping in some cash. For B-list wishes, suggest teens set aside future earnings and buy the items themselves. This helps them associate saving money and making sacrifices with getting things they want, says University of Washington finance professor Lewis Mandell.”
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