(NC) Does your teen seem disinterested in learning life skills like finance? The truth is that many high school students wish they had a better understanding of personal finance.
According to a recent survey on financial education, 60 per cent of teens polled said they wanted to learn from their parents and teachers.
With teens eager for financial education from trusted sources, parents are in a position to help address their most pressing concerns. For many young people, the cost of post-secondary education is a major worry.
Not all families will be comfortable with their teens knowing the details of their financial lives (and for some, talking about money can be culturally taboo). But being open and honest with your kids in an age-appropriate way can help them understand expectations as they prepare for adulthood:
Share your own past financial mistakes. Let your kids benefit from the lessons you’ve had to learn. For example, if you struggled with debt in early adulthood, share what you wish you had known then. Introduce the concept of credit and outline the financial consequences of getting into debt they can’t manage.
Help your teen understand how interest works by charging them a small fee to borrow from you. Interest can be a major shock for many young borrowers. It can lead them to sign up for credit cards with interest rates they can't handle because they don’t fully understand what they’re agreeing to.
Start deeper conversations about investing. Teens are much more interested in the topic of investing than you might think. Many have already started to recognize that they can’t build their future on just their regular income.
Start by teaching your kids about different investment vehicles. From there, you can either look into setting up a custodial account (minors under the age of 18 aren't able to open or invest in an investment account without a parent or guardian listed as well), or use an online investment simulator.
“This can be a great time to practice investing and make mistakes, because when you’re a kid, you still you have a cushion to fall back on,” says Shawnnette Fraser, an associate VP at TD Wealth.
Help them pick stocks from companies they recognize to make the process more engaging and talk about what happens as the markets fluctuate.
By creating a safe environment to experiment and make mistakes, you can help set up your teens with the tools and mindset they need to make smart investment decisions later in life.
