Amy Merrick 2016-08-13 00:30:32
You work hard to equip your kids with the life skills they need to succeed. Here’s how you can help them learn to manage money. When Teressa Hackenmiller starts a conversation with teenagers about money, she often hears them say that if they could buy whatever they wanted, they would be happy. Even her 16-year-old son used to have that attitude. But Hackenmiller, a Thrivent Financial representative in Cedar Rapids, Iowa, pushes teens to think harder. She asks them to name pop-culture icons who are unhappy despite their wealth. Once they do that, it’s easier to see that money isn’t the root of all happiness. It isn’t always easy for parents to talk about money with their teenagers, but it’s a valuable conversation to have. Here are five money lessons from Thrivent members and financial representatives to help your teens prepare for the financial independence you want them to have. 1) Share first, then save, then spend. Gina DeBoer, a Thrivent member and youth director in Independence, Iowa, and her husband, Greg, a pastor, encourage their two teens and two younger children to give away 10% of the money they receive as gifts or earn from their jobs. The practice teaches teens generosity and reminds them that everything they have belongs to God, she says. The kids typically keep about $20 for spending money and save the rest. When they have their eyes on a bigger purchase, DeBoer helps them look at their savings accounts to see if they can make the purchase right away, or if they should wait and save up for it. By sharing and saving first, kids aren’t tempted to spend more than they’d planned. “You need to assign all the money a place so that it doesn’t just disappear, and you don’t know where it has gone,” DeBoer adds. 2) Practice using credit. Once teens have their first job, it can be a good idea to have them sign up for a credit card, says Kris A. Bougie, a Thrivent Financial representative in Appleton, Wisconsin. Parents may need to co-sign, but the card should be the teen’s responsibility. By learning to use a card with a low spending limit, teens can begin building their credit. “That’s important because they’ll need credit to get an apartment when they’re out on their own,” Bougie says. 3) Use technology to fight impulse buys. Hackenmiller tells teens to use their phones to avoid impulse purchases, as she does. If she finds something she really likes while shopping, she snaps a photo of the item and its price tag. “Having a picture gives me instant ownership,” she says. “If I really need it later, I will go back and buy it. However, most of the time I don’t need to.” In addition, a growing number of mobile apps are taking the pain out of money management. Here are a few that look interesting: The Mint app automatically pulls all financial accounts into one place, so it’s easy to create a budget and pay bills. SmartyPig is an online piggy bank that helps users save for financial goals—and contribute to help other people reach theirs. And there’s even a way to move allowance into the 21st century: iAllowance tracks chore completion, sends reminders and shows progress toward rewards. 4) Distinguish between wants and needs. The DeBoers will pay for their teens’ basic clothing, but if the kids want a more expensive brand, they have to pay the difference themselves. When her son wanted a video gaming console, Gina DeBoer pointed out that he had already spent “fun” money on dates with his girlfriend. He ended up waiting eight months to buy the game system with birthday money. While such conversations can be stressful, DeBoer says they lead to greater trust. “We don’t expect them to be perfect,” she says. “We just expect them to try.” 5) Put money in the bank. When Bougie’s children were teenagers, she would deposit their allowance into a bank account rather than give it to them in cash. That practice taught her children to read a bank statement and made them more thoughtful about spending. “They liked seeing the total go up to $100, then $200, then $500,” she says. “If it was their money, they were much more discriminating about asking to withdraw $20 to go to the mall.” IN YOUR WORDS We asked for your opinion on Facebook. Here’s what you had to say. What’s your best tip for teaching teens how to be wise with money? Linda Baacke Buxa: We wrote down everything we spend money on for them. We divided that by 52 to come up with a weekly allowance. Then they are responsible for everything except school costs and food in the house. This helps them realize that much of their money goes for necessities, not simply the fun stuff. Mary Creekmore: Start them young, and teach them that they can earn their own money by doing chores. Then show them that if they save the money from their chores for a while, they will be able to get something nice that they want instead of a bunch of cheap items they won’t 12 really use again. Bernice Crouse: Give them a reasonable allowance as long as they do chores, and let them save for the things they want (not need). Vicki Elliott: Talk about money and what you value. Let your kids hear you deciding what you’ll purchase and why, what you’ll be giving up to make that purchase and how you’re saving. JoAn Bethke Jacobsen: During the teen years, parents pay for a non brand name of clothing, and the teenager would have to contribute the rest if they wanted a name brand. RESOURCES Thrivent has several options to help teens and families learn how to be wise with money. • Parents, Teens and Money Matters® Workshop This workshop can help families discuss how money helps them live out their values. The teens receive the Cash Cache® personal finance organizer, designed with pockets for sharing, saving, spending and investing to help teens keep track of their money. The parents receive a discussion guide with exercises and discussion topics to keep the money conversation going. Talk to your financial representative or go to Thrivent.com/findaworkshop to see if one is planned in your area. • Thrivent Federal Credit Union Thrivent Federal Credit Union (Thriventcu.com) offers a student checking package that includes a line of credit of up to $500 to help students establish good spending habits and build their credit while enrolled in college. For convenience, the line of credit includes free ATMs for students to access while on campus. Deposit and lending services are offered by Thrivent Federal Credit Union, a member-owned not-for-profit financial cooperative that is federally insured by the National Credit Union Administration and doing business in accordance with the Federal Fair Lending Laws. Must qualify for membership. Insurance, securities, investment advisory and trust and investment management accounts and services offered by Thrivent Financial, the marketing name for Thrivent Financial for Lutherans, or its affiliates are not deposits or obligations of Thrivent Federal Credit Union, are not guaranteed by Thrivent Federal Credit Union or any bank, are not insured by the NCUA, FDIC or any other federal government agency, and involve investment risk, including possible loss of the principal amount invested. Amy Merrick teaches journalism at DePaul University in Chicago. Her work has appeared in The Wall Street Journal, The New Yorker online and the Chicago Sun-Times.
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