Here’s how to facilitate good money habits in your teen

What kind of money parent are you? Take our 2-min quiz to find out.

You’ve taken the money parenting persona take our 2-min quiz and discovered that you’re a Facilitator. That means you’re a parent who believes in the importance of attaining financial security, and that it is important for your child to learn this on their own, with some guidance.

But as your child becomes a teenager, you might find it difficult to speak to them about pretty much anything. That’s precisely why it is important to have some of those difficult (but definitely necessary) conversations with them; one of which is about money.

Majority of Facilitator parents let their children learn from experience with some guidance, found the Asia Money Parenting survey commissioned by Eastspring Investments. And your parenting persona as a Facilitator ties in perfectly with teens, who are in the phase of self-discovery.

In this phase, they strive to prove their independence by pushing boundaries and exploring, which also gives them opportunities to learn to be more self-reliant, have a strong sense of self, and be more responsible.

With a little facilitation from you, your teen can learn how to make better choices.

Start with an open and honest conversation; you want your teenager to see you as someone who is approachable, not judgey (teen lingo, get used to it) and importantly, not someone who forces your opinions on them.

Explain to them how a lack of financial education can have adverse effects on the way people handle their lives. Now that they are just a few years away from being out on their own, or taking on their first job, it is the perfect time to talk about money.

Keep your opinions neutral and hear them out as you go along. Remember that as a Facilitator, you aim to guide and help — you don’t believe in coddling anyway!

1. Purpose first

For starters, teens need to understand why money is important. Ask them to share their goals, for example, the kind of house they want to live in, or the car they would like to drive in future. Inject some reality in their dreams as you give them an idea of how much money they would need to reach their goals.

2. Set goals & budgets

A recent study found that 69% of Generation Z (those born in the mid 1990s to early 2000s) said that they don’t have a clear understanding of how much they spend versus how much they should save for long-term goals¹. Chances are, your teen is similar.

As a Facilitator, knowing how to save is the core of achieving financial security to you, and this is something you want to pass on to your child. Share ways to keep track of their expenses with your teen and guide them on the basics of budgeting. You can keep it simple, like the 50/30/20 rule² — 50% for essentials, 30% for personal spending and 20% towards saving — and guide them in planning their budget.

You could also share how your family’s budget is managed, so they understand how this could translate with real numbers.

3. Earn your keep

Teens are self-conscious and it’s normal for them to want what their friends have — even if it’s expensive. This is a good opportunity to allow them to earn some money (or all) for what they want to buy. This fits in with your persona as a Facilitator too — you believe money should be earned, and your teen should learn this too.

So whether it’s a part time job, tutoring or doing chores at home, encourage your teen to make their own money. Not only does this reinforce the correlation between working, saving money and reaching goals³, it also helps instill a sense of independence in these crucial teen years.