The Talk Your Teen Needs

Oh yes, we all remember those teenage years- young, free, living life to the fullest! 

While we may want to forget about that outrageous hairstyle, overwhelming hormonal acne, or first crushing heartbreak, there were so many admirable qualities we embodied during those innocent times. Accompanying these live-life-large years, we might have also acquired some lasting consequences to some of our naive choices, especially when it comes to credit.

If you currently have a teenager, be sure to have the talk with them.  

No, no not that talk! The one about their financial future! 

Teaching teens about the lasting impact of their financial choices can save them from lots of struggle in early adulthood, plus provide them with more opportunities. The truth is most teens aren’t even thinking about these things just yet, so building awareness is vital in painting the long-term picture. 

Here are a few key credit lessons to share with them now.

Lesson 1: “You shouldn’t rely on your credit card.”  Showing your teenager other avenues of payments will serve to keep them out of unnecessary debt. This will guide them in establishing a healthy relationship with their credit card and explore other options, which is ideal in setting savvy financial foundations.

Lesson 2: “There is a limit to what you can purchase.” You’ve heard that phrase “it was like a kid in a candy store!” The impulse to buy as a teen is excessive as they step into this new realm of freedom. Everything feels void of consequence at this age. Plus, they are highly influenced by their favorite celebrities who they see living a lavish lifestyle. Putting purchases into perspective will help your teen to manage to live within their means and deciphering what is reasonable for them at that moment.

Lesson 3: “Your creditor isn’t okay with you missing a payment.” Up to this point, your child hasn’t had this kind of financial boundary set. Most of their financial interactions have come through chore money or borrowed money from caregivers. Even when the intention is to pay someone back, the leeway is still there in a way that isn’t with a creditor. Explaining this to your child and the consequences of their actions in missing payments or being late with payments, will help them be more diligent.

Lesson 4: “Mistakes will follow you for years to come.”  It feels like we’re constantly saying this to our teens, doesn’t it? Simply because it’s true and credit is no different. As their protectors, it’s our hope to mention it now instead of them having to learn through challenging experiences. Ultimately, they are free to make their own choices. However, being sure we’ve done all we could to provide the necessary information for them to make the best choice they can is what we should be committed to.

Lesson 5: “Only use your credit card if you can afford to pay it back.” Giving a teen a credit card can feel like free money to them. We know that’s not the case, but they may not see it that way. Put it in terms that their card should only be used within a means that they are able to pay back. Explaining what will happen if they overspend will hopefully help prevent that scenario from occurring.

Lesson 6: “Don’t let friends/ TV/ internet influence buying decisions.” With social media and other media streams right at your teen’s fingertips, it makes influence easy and purchasing even easier. During a time when the desire to fit in socially is the priority, explain the effects of online shopping, how to research each purchase and the concept of marketing. Right now, teens tend to take everything their friends and favorite influencer are saying as truth. By taking them through the process of doing their own research before purchasing, you can show them the more problematic systems that exist and how to avoid them.

See, now isn’t this the talk you wish you received as a teen? Keep in mind, the goal with these lessons and conversations are to provide your child with awareness before they encounter a sticky situation. Approach this in a way that doesn’t make your child frightened or ashamed of purchasing, rather empower them to make smart financial decisions that will set them up for a brighter future. As we know, restricting only causes more problems. So it’s important to strengthen their independence through insightful guidance and allow them the space to flourish within their financial endeavors.