If you have children in high school, you only have a few years left to instill solid financial skills. One of the best ways to do this is to open up your own finances. Instead of hiding your financial information and hoping for the best, consider having an honest discussion with your child about both the good and bad decisions you’ve made with money.
Here are some ways to include teens in your family’s financial portrait:
1. Give them a peak at the family budget. This will actually provide a realistic picture of what it takes to run a household.
2. With discretion, reveal how much money you make. This can be quite an eye opening experience! I honestly had no clue how much money my parents made until I was in high school and it definitely put things in perspective. There’s also little use trying to hide this information; you must reveal your income on your child’s federal application for student aid.
3. Don’t hide your debts, if you have them. By the time kids are in high school, they aren’t oblivious to how stressed you become when the Visa bill arrives. Be honest. Let them you know you didn’t always use credit wisely and explain what you want them to do differently.
4. Don’t be afraid to say no. Of all the things I “had to have” and never got, I don’t remember any of them. I quickly got over my desire or decided to start saving up myself.
5. If you still pay bills by check, let your child write it out. This will include them in your family’s finances. If you’re utilizing online bill pay, you can have them type and click. Currently, I sometimes “pay” our family cell phone bill and the credit card used for gasoline.
6. Let them know ahead of time whether you’re paying for all of, some of, or none of college costs. You don’t want to shock them with news on graduation day that they’re completely responsible for financing their education. Also mention whether or not you would be OK with funding any sort of business endeavor they’ve created.
My own parents have been quite open about their finances and I definitely feel it’s been a positive move on their part. Knowing what they did right and wrong will no doubt help my own finances.
Note from Frugal Dad: I’m impressed by Ryan’s financial awareness at such a young age. I was well into my 20’s before I finally began to wake up to my own financial mess, and it took another couple years to finally take action on improving my situation. Very well done, Ryan – you are well on your way to building significant wealth having identified these concepts so early.