Smart Kids, Smart Money – Part II

Looking for more resources to help your kids become financially savvy?
Click here to read Part I of our “Smart Kids, Smart Money” series.

If you tuned into the first segment of our “Smart Kids, Smart Money” series, you already know that good money habits start at an early age. If you have teenage children, there’s a chance they’ve absorbed a great deal of information about managing their finances by following your example.

Even if you’ve already laid a solid foundation for helping your child achieve a bright financial future, it’s essential to reinforce and build on those concepts throughout their teen years. The teen years bring greater independence, preparations for college and a myriad of other important milestones that will start your kids on the lifelong, practical journey of learning how to handle their money.

Here are a few more tips to help your young adult start this journey on the right foot:

Smart Kids Smart Money - Part II

1. Encourage your teenager to work

The experience of getting a job and earning a paycheck can be incredibly empowering for your teenager. Many teenagers get their start in the working world by babysitting, doing yard work, shoveling snow and counseling at summer camps. While some teenagers may be proactive about finding a job on their own, others may require some help the first time around — and this is where you can facilitate.

Be your teenager’s advocate, find out what she is interested in doing and help her advertise her services by word of mouth or on message boards among your friends and neighbors. If your child’s school schedule or extracurricular activities don’t allow her to have a regular job, you can pay her for doing chores around the house.
If your child has a smartphone, both of you can use the iAllowance app to help keep track of chores that are finished, send reminders and set chore goals.

2. Give your teenager the lowdown on bank accounts

When is the right time to open a bank account for your child? There is no right answer to this question — some parents wait to start savings accounts for their children until they’re older, while others open accounts for their children while they’re young and wait to introduce them until they’ve matured. In line with the “save, spend and give” concept that my colleague Jordan highlighted in Part I, you can help instill the habit of saving early on by encouraging your children to save a percentage of the money they earn from work or receive as gifts from relatives.

Typically, checking accounts are more appropriate for children that have regular jobs or are in college. Many banks offer reduced fees if a child’s checking account is linked to her parent’s account, so ask your bank if this option is available to help ensure your child’s account doesn’t include high fees that will eat away at her balance.

3. Engage your teenager in discussions about college financing

Each family’s situation is different, but if college is on the horizon for your young adult, consider engaging her in discussions about paying for college, as a family.
If you’re applying for financial aid for your child, encourage her to work with you to fill out the applications. Showing your child how you approach this important task — collating information from tax returns and financial statements — can be a hands-on way for her to learn about finances.

Not all parents feel comfortable disclosing their financial situation to their children, and that’s okay. But the more you engage your children in the application process, the more likely they are to value and make the most of their college education.

4. Tap financial literacy resources for teens

Teaching by example is certainly the most effective way to impart financial knowledge to your children, but it might also be helpful for your child to hear thoughts about finance from people other than you. Some schools offer financial literacy programs that teach several important money concepts. We’ve also collected a few suggestions for financial literacy websites and books that your teenager might like:

— TheMint.org: This website is designed for multiple age groups and offers a variety of interactive resources and practical tips for handling money.

— TeensGotCents.org: A personal finance blog for teens by teen Eva Baker.

— “The Teen’s Guide to Personal Finance” by Joshua Holmberg: This book starts with the basics, illustrating essential financial concepts that every teen should know.

— “The Complete Guide to Personal Finance for Teenagers and College Students” by Tamsen Butler: From budgeting to saving for college, this book covers creative tips and strategies for helping teens achieve a range of financial and life goals.

When it comes to finances, every family is different; there are no one-size-fits-all recommendations for how to teach your kids about money. No matter how you choose to broach the topic, maintaining a dialogue about your family’s approach to finances can be an important building block for helping your teenager develop a healthy relationship with money.

 

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional. Hewins does not provide tax, accounting or legal services.
Rafia Hasan
Rafia Hasan

CFA, CFP® | Director of Investments

Rafia Hasan, CFA, CFP®, is the Director of Investments for Hewins Financial Advisors, based in Chicago, IL. Rafia is a member of Hewins' Investment Committee and has a deep knowledge of the financial markets, specifically in the areas of alternative investments and private equity. She also specializes in personal financial planning and estate planning for women investors.

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Smart Kids, Smart Money – Part II

time to read: 3 min