Money Advice to My Teenage Son
January 18th, 2008 by Ana
My son is a teenager, and thinks his life will be so good no matter what he does. This includes money. Here is the advice I give him, and fervently hope he listens to and takes to heart:
- Do not finance a vehicle! Please, you are young…don’t sign your life away to impress the girls and other boys at school by trying to drive something that you can’t pay cash for. If you finance a vehicle at age 16, by the time you get to college it won’t be impressive enough to catch the eye of that sorority sister who is in your english comp class, but the payments will still be there and you will probably still be upside-down in it.
- Do everything you can to get scholarships, grants, work-study, and pay cash for your college tuition and textbooks. Your grandma, my mother, had student loans from pharmacy school for FIFTEEN YEARS…that’s longer than you’ve been alive so far! Student loan payoff terms are getting longer and longer, and it’s just not worth it. Slow down, go part-time and work while in college if you can’t get enough free money. I am doing it, and it is so much better than going into debt.
- Stay far FAR away from the credit card tables at school. Thankfully, the high schools haven’t started letting those financial predators on premises yet, but I see them every single semester on the college campus. You are very good at math, so do the numbers to prove to yourself that credit cards are a really bad deal for the consumer if you don’t want to take my word for it.
- You have seen me do a budget for over a year now, and I have let you watch in the hopes that you will do this for yourself. I also hope you noticed how much we have been paying to get out of debt! If you do a budget your entire life, and LIVE WITHIN YOUR MEANS, you won’t fall into debt like I did. Learn from your mom’s mistakes here, kiddo!
- Start saving for an emergency fund. You have seen me handle car problems and fix the heat in the dead of winter because I had an emergency fund. It doesn’t need to earn much interest…just have it.
- Start saving for retirement as soon as you have some extra money. Even just $50 per month at your age will grow into an amazing amount by the time you get old enough to be concerned about it (once you figure out that you might possibly live past the age of 30). You’re starting to work with compound interest problems in math, so you can probably now figure how starting early will make you literally millions of dollars.
I learned bad money management techniques from my parents, and from my son’s father. I can only hope the experience of my son being involved in our climb to get out of debt - when he is old enough to understand it - will leave a lasting impression on him for the rest of his life. Every parent wants his or her child to have a better life and be more successful, and I am no different. I won’t be able to “bless” my son with actual money. But I do hope I can lift the money “curse” by teaching him a better way than what I learned at his age!
This is part of a series “Money Matter For All Ages” Previous posts are:
- Financial Strategies for Infants and Young Children By Madison of My Dollar Plan
- Teaching PreSchoolers About Money by PaidTwice
- Personal Finance for Children and Pre-Teens by Lynnae of BeingFrugal.net
- GLBLguy also talks about teens and money at Gather Little By Little
- Tomorrow Mrs Micah will discuss being college age and her money.
As usual, I will do a full wrap-up of the project at the finish, so keep an eye out for it! This one promises to be really good 
Posted in family |
January 18th, 2008 at 8:49 am
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January 18th, 2008 at 12:22 pm
Hey there—I want to share my “spreadsheet” of the plan my DH and I made for enlightening my son as to money.
I want him to be as comfortable with his financial self as I do with his sexual self (yikes, but I was brought up that sex was dirty–don’t want that for him!), so we decided it is time for him to face reality!
We start with a family meeting Saturday night—and the topic is “February Budget”. We also have some discussion items. We need to decide if we are going away for Spring break, we need to decide if we’ll use our camper enough this summer to pay lot rent (or do we sell it?), and we want to have him begin to understand HOW MUCH everything costs.
We’ll have these bi-weekly, and I planned the first one. Pizza and pop, meeting, then an hour of Rock Band, and I get to be the drummer! I’m looking forward to seeing what he and Dad come up with!
Ana—should I just copy and paste?
I’m proud of what we’ve put together—I just need to stick to it!!!!!
January 18th, 2008 at 1:44 pm
Sue…how big are we talking?
January 18th, 2008 at 1:45 pm
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January 26th, 2008 at 2:50 pm
great post…
hopefully he listens .
January 27th, 2008 at 7:02 am
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February 1st, 2008 at 11:06 am
Nice advice! I am sure that with good tips like this it will be easier (hey, nothing is easy with kids) to teach some common sense to your son!
The only thing I disagree with is your last point - “Start saving for retirement as soon as you have some extra money.”
This might seem like good advice but in fact it isn’t. It seems that whatever amount of money you have you never have some “extra money”. Life is full of examples that prove it - if you get a raise you will still spend your money by the end of the month, if you find a 100 dollar bill you will spend it. At least that is the case with 99% of people.
Instead of waiting until you have some extra money to start saving we should start to save immediately. You should even save money when you think that you don’t have any money to save.
The way you do it is that on the first day you get money (salary, allowance etc) you take a small amount and set it aside. For teenagers it could even be 10 dollars - the important thing is that they would see how even the 10 dollars grows and that they would form a habit of paying themselves first.
If one starts this method on his teenage years he will always be debt free.
Roman
February 1st, 2008 at 2:39 pm
I sit corrected Roman…I think I meant he should set aside whatever he can as soon as he can. If he starts with only $50 a month when he first starts working (usually 16) he will be off to a bang-up retirement nestegg. The trick is convincing a 16 year old they might possibly live to retirement age!
February 13th, 2008 at 4:43 am
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March 10th, 2008 at 8:58 am
I just found your blog and really liked this post. As a parent myself attempting to break bad money habits, I wish you all the luck in the world in instilling good money habits in your son.
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