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Money Conversations With Teens

Father teaching son about money

Over the years, I have been teaching my children how to manage their finances. With this comes questions, and I may not always have the answers. This is common when parents teach their children about finances because we think they should know the answers or the questions have never come up in our personal lives. My youngest daughter continually asks questions about investing, credit, and budgeting. Here are a few of the questions.

When Did You Start Investing?

My daughter began investing when she was 14, and I have encouraged other family members to start investing for their children even earlier than that. I started investing in my twenties. This combination of investments included savings bonds, certificates of deposits (CDs), and retirement accounts. At that time, I was focused on saving instead of building my wealth using stocks, money market accounts, or ETFs. Now, I invest heavily in these investment vehicles and have started dabbling in cryptocurrency.

Whether you started in your teens, twenties, or thirties, it's never too late to begin investing. It's essential to know your risk tolerance when it comes to investing. This is one reason why I delayed the riskier investments. I didn't feel comfortable risking my hard-earned income when I still had kids at home and other financial obligations that were a priority. If you don't know your risk tolerance, talk to a trusted advisor and your partner so you're all on the same page when making financial decisions.

How Often Do You Pay Your Credit Card?

I added my children as authorized users on my credit card to get experience managing credit and build their credit scores simultaneously. When you add an authorized user to your credit card, their purchasing and payment activity can affect your credit and theirs. As a result, I had a conversation with my children to let them know that it's essential to stay aware of their credit card balances. This included knowing credit card due dates and knowing when interest would be charged on their purchases. So, I encourage them to pay their credit card balances at least semi-monthly to avoid any late fees or interest.

How Often Do You Balance Your Checking Account?

The answer to this question depends on my purchase activity for the month. I balance my checking account at a minimum twice a month for the most part. Balancing my budget semi-monthly helps me ensure that all paycheck deposits, automatic transfers, bills, and regular monthly expenses are accounted for. It also helps to keep my spending in control. If I notice that I'm spending more on groceries than the previous month, I work to find different ways to stretch our meals or cut back in other spending categories.

Getting Comfortable With Questions

Whatever the questions are, it's okay to be uncomfortable at first. As I mentioned, I don't always have the answers, and you may not either. But after a while, you will find that it gets easier to answer the questions and share information with your teens. If you don't know the answer, let them know that and find the answer together. Finding the answers together can encourage your teen to continue the money conversation and prepare them for making financial decisions on their own.


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