3 Money Lessons To Teach Your Teenager, According to Financial Author Anthony O’Neal
Written by
Peter Burns
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Cory Dudak
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If you open up TikTok, YouTube or any other social media platform, you won’t need to scroll for long before finding bad financial advice. Growing up, most children and young adults don’t learn how to manage their finances. Many schools don’t offer the necessary classes or highlight the importance of financial intelligence. In fact, only 23 states require high school students to take a personal finance course to graduate.
Because society isn’t going to teach your teenagers about money, it falls on you, the parent or guardian, to send the right message. Anthony O’Neal, a podcast host, bestselling author and personal finance expert, tackled the subject in a recent Instagram post. Here are three things you should teach your teen to help them sculpt their financial future.
The Basics
Since your teen’s school isn’t going to teach them the financial basics, don’t expect them to get their first paycheck and prioritize their retirement over a new video game release or designer bag. You must explain how wealth-building works and how to work toward financial freedom.
O’Neal suggested going with your teen to open a bank account. Make sure they are a part of the process to gain some experience and knowledge about banks. Here are other areas you should cover:
- Banking: Getting your teen a bank account and familiarizing them with mobile banking will prepare them for when they need to make transfers and pay bills as adults.
- Budgeting: Budgeting is an essential piece of financial education. Teaching your teen to track their spending and reach financial goals will move them closer to financial freedom.
- Savings: Saving isn’t as fun as spending, but there are many more advantages. Explain the benefits of saving money, and why they should start creating an emergency fund from day one.
- Investing:Â While this may be an advanced concept for teenagers, the earlier they start investing, the better. Explain how compound interest and long-term investing can help them build wealth.
Credit Cards and Debt
One of the most dangerous financial traps teens fall into is debt. When you’re young, it’s easy to accept money without realizing the long-term consequences. Teens can easily apply for credit cards and student loans with the attitude that they’ll figure it out down the road. The Education Data Initiative reported the average person with federal student loan debt owes $37,853, which will take many years to pay back.
Learning how debt can derail your finances through accumulating interest is one of the most valuable lessons your teen can learn. Likewise, it is equally valuable to teach them about what a credit score is, how to build it up and why it’s important.Â
Be Content
With the internet and social media, it takes a few flicks of the thumb to start feeling like everyone else has more than you do. People of all ages fall into the trap of comparing themselves to everyone else and attempting to keep up with the Joneses. O’Neal suggested teaching your teens how to be content with what they have at an early age.
Teaching your teenager to appreciate what they have and enjoy life without overspending will pay off immensely. Not only will this be a great financial lesson, but it will also contribute to their overall confidence.
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