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Talking to your teenager about money management

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Why should families talk about money? Arguments over finances are a common problem in many families, regardless of income, age, and education. They are often due to inadequate family communication in general. Beginning to include your children in age-appropriate discussions about family finances is a great first step to helping them learn to value money and spend it wisely. If parents never talk with their children about money, they are not providing their children with the guidance and hands-on financial experience needed when they begin to spend money of their own.
Like with many things, children learn about money by watching their parents. They also learn by practicing money management.  Teenagers who take part in regular discussions about their family’s financial management learn how to make financial decisions on their own. Even if a child does not earn money to help with the family’s expenses, the children in a family influence the family’s spending choices; the wants and needs of children are a part of the family budget. Children, teenagers especially, are oftentimes unrealistic about the family’s financial situation, typically over or underestimating the family’s income and expenditures. It is important that parents help paint a realistic picture of the family’s financial circumstances for their teen.
If your teenager has an allowance, or birthday or holiday savings of their own, they will likely want to decide how to spend their money. Peers may influence their choices, so provide plenty of practice through the family’s financial decision-making in long-range planning, record-keeping, and credit. Teach your teen to read a bill. Help them open a checking and savings account. Work with your teenager to develop his or her own spending plan.
Make discussions about money routine and comfortable by using these tips to improve your family’s communication skills:
• Be honest about your money situation. If you cannot afford something, let your kids know.  Use your discernment when disclosing information, but do not lead your children to believe you have more disposable income than you really do.
• Know that conflict may arise. Don’t avoid (or ignore) it.
• Learn to manage conflict by respecting each family member’s differences.
• Try to be flexible. If possible, work towards a decision that is agreeable to all.
• State your wants, needs, feelings and thoughts, and allow family members to do the same.
Read these tips and more in the University of Kentucky Cooperative Extension publication, Money Management: Family Communications about Money, available at http://www.ca.uky.edu/agc/pubs/fcs5/fcs5106/fcs5106.pdf
Written By: Nichole Huff, M.S., CFLE, University of Kentucky, Family Science s Doctoral Student
Reviewed By: Jennifer Hunter, Ph.D., University of Kentucky Family Finance Extension Specialist

Jane Proctor is Trimble County’s Cooperative Extension agent for family and consumer services.