WASHINGTON — Teenagers who learn how to manage money and become good savers turn out to have greater financial success later in life.
“The bigger, most important thing is actually having conversations about money. The reason an allowance is so helpful is because it creates those conversations,” says Kimberly Palmer, senior editor for U.S. News Money and author of “The Economy of You.”
Beyond giving your teen an allowance, parents also can instill good money management skills and financial habits in children by talking through their own purchases.
“If you’re out buying something, especially something for them, where they are interested in it, talking through how you save, how you compare prices — all of that can help them think through money,” Palmer says.
“And they start to get that concept that it’s not something automatic and when we pay with plastic, we’re actually going to be paying the bill at the end of the month.”
Palmer says that parents have to be aware that how they handle money can have a big impact on their kids.
“They are watching us. We are their models,” she says. “Everything we do, even when we’re at the grocery store, not even thinking or buying something for ourselves, they’re observing and they might end up copying our behavior.”
And while most teens don’t seem to interested in what their parents are doing, Palmer says it’s teenagers that are actually most interested in spending their money wisely.
“Teenagers, around 15 and 16, are most motivated to be picking up these signals and paying attention to money management,” Palmer says.
