Welcome back to our financial literacy series! Today, we tackle the emotional and confusing world of teenagers. We were all teenagers at one time (even though current teens could refuse to believe that) and we made a lot of mistakes along the way. Since I don’t currently have a teen, this post will be a “shit, I wish I had done this when I had all that disposable income”, rather than a how-to post.
Most of us lament back on our teen years with a shudder. It’s awkward at best, potentially traumatizing at worst. Not only are teens trying to figure out who they are and what they believe in, they are also looking for acceptance in an often unaccepting world. However, while we could spend months reliving our teen years, for the purpose of this blog, we are going to stick to money. Here are the four lessons I wish I had learned about money:
No, Lindsey, you did NOT need that outfit from American Eagle!
The majority of us had jobs while in high school. I was fortunate to have some pretty solid jobs – my first job, at 15, was working at the AMC theater (R.I.P AMC). I made minimum wage, but since I only had my cell phone bill to worry about, I was extremely fortunate to have a solid disposable income. What did I do with it? Spent it on stupid shit. My closet was stocked with new clothes and shoes, most I probably wore only once. The mall was my playground and I came to win. I spent so much money on clothes, in hindsight it was embarrassing. Whhhhhy did I spend my money on stupid shit?! Because I was not financially literate. I never thought it was important to learn about money, because I naively thought this fun ride would last forever. I also thought I would fit into American Eagle jeans forever and that was a harsh and cruel reality check.
What should parents do to help their teens save? Why not implement a 48-hour spending challenge. Ask your teen to think about their purchase for 48 hours after they see it. If they’re able to walk away, without buying the item, and spend the time thinking of the why behind the purchase, they may be less likely to recklessly spend. Make sure to set an example and do this yourself!
WHY DIDN’T I SAVE FOR UNIVERSITY?!?!?!?!
Okay, so right now, you may sense my frustration. I don’t deserve pity or sympathy, because I got financial help throughout university. I am one of the lucky few who only needed a small loan as opposed to one so large it took decades to pay off. That being said, I could have done more. SO MUCH MORE! Due to my complete ineptitude surrounding money, I didn’t put two and two together that school is expensive. I had decent paying after school jobs, why didn’t I save ANY OF IT?! I clearly needed to have done more research about post-secondary (perhaps its karma that I am now a post-secondary recruitment advisor) but it’s with this experience I can lovingly warn others to not follow in my footsteps. If you have a teen, talk to them NOW about how they plan to save for post-secondary. Figure out, as a family, how you can support them and how they need to contribute.
Fortunately, as a teen, I never went too extreme with my credit card. I got one when I was in OAC (Grade 13, back when it was an actual grade) and didn’t really use it. I did, however, wish I learned more about the perils of consumer debt. If you’re hesitant about getting your teen a credit card, it’s best they use it now, under your roof, so you can monitor how they are using it. Make sure it is a low balance credit card, do they don’t run the risk of acquiring a lot of debt. Once they go to school, it may be harder to monitor their spending habits. Have your teen be the owner of this card, including tracking their spending, paying the monthly bill and have it in their name. Talk openly and honestly to your teens about debt and the difference between good debt and bad debt. If you have struggled with debt, open up to your teens, within reason, about that experience. It may be hard, but by being honest with them, your kid may be less reluctant to hide purchases from you.
Research post-secondary options
When it came to course-selection time at high school, I did everything by chance. Sure, I did well in Grade 11 something-something, let’s take it again in Grade 12. While this doesn’t have a direct correlation to money, at the end of the day, I wasted a ton of money and time doing a degree that led to slim career options. I wish I had taken a closer look at the admission requirements for my schools of choice, so I knew how much harder I needed to work to get that GPA. I wish I had taken more tours and asked more questions. Instead, I blindly applied to a couple universities and hoped for the best. While I absolutely LOVED my time at university, I wish I had done a degree which would help me more in the future. What the hell can you do with a history degree? I know there are options, but at the time, I didn’t research them. I was too busy at American Eagle! I wouldn’t have changed my journey, I would have changed the experience in which I began the journey.
At the end of the day, teens are influenced by everyone and everything. They are trying to find their own identity, while still trying to ‘fit in’. Teens have an unbelievable amount of stress and pressure put on them, probably more than I did when I was 15. We, as adults, need to simply be there. Be present and show your vulnerabilities to your kids, especially when it comes to how you handled your money when you were their age. Your teen may need a gentle reminder that you were once their age, and yes, in fact, you do understand what it was like to be a teenager.
Next week, we speak about twenty-somethings. They are desperate to be an adult, to be taken seriously, use their new degree/diploma, and make a difference. It’s hard to be and do these things when you’re straddled with student loans, consumer debt, and still living at home with your parents. What can we do? Come back next week to read more.