What does money mean for you this month? Rent or mortgage? A car payment? Groceries? For some teens, money is still something a little more abstract.
"Money is just a thing to do," said 15-year-old Aryon. "Like, you pay people money to have fun."
But teens like Aryon, and his friends Miranda, Blossom and Irene, all in Beaverton, will soon face a major financial challenge when they turn eighteen.
"And all of a sudden, they are flooded with mail full of credit cards and essentially what they see as free money," said Sarah Fast, with the Boys and Girls Club of Portland. "Oftentimes, what that does is it almost instantly ruins their credit."
That means any money weakness you might have could be magnified. Some teens are already aware of some of their potentially problematic money-spending habits.
"I don't really have self-control," said Irene. "When I'm with friends, it's very difficult to manage how much I spend, because I don't notice.”
Aryon said, "I tend to buy cheaper stuff, but I don't really pay attention to whether I need what I'm buying. It's kind of a flaw, but I still do it."
Blossom explained, "I'll go shopping with my friend. I'll see cute clothes and sometimes I'll just buy them. Guilty!"
So how can you---and they---fight back, before the flood of credit card offers hits?
The Boys and Girls Club already has some answers from its program for kids, called "Money Matters." Kids can start the program at age 12 and continue on through high school.
"Money is always something you'll have to be dealing with. Credit is always something you'll have to be dealing with," said Fast. "And I think the earlier you start it, the better."
Here are some ideas from the program that parents can use with their own children as well.
First, have your kids set money goals and plan how they will achieve those goals. For example, some kids might want to save for a toy or a video game system, which would be a short-term goal. Some teens might want to save for a car or their own apartment when they are older or for college, which would be a longer-term goal. Have your kids re-evaluate their goals every so often, and have them work for it, rather than fulfilling the goal for them.
The next step, kids need to learn the difference between "needs" and "wants." The Money Matters program has kids describe what is a "need," like a pair of shoes, versus a "want," like an expensive, trendy pair of shoes. The club also has kids do service in the community, such as helping serve food to homeless people, which helps them see the difference.
"It really gives them an understanding: what I may "need," what I may think I need, is not sort of a basic need. It sort of changes their perspective," said Fast.
Also, kids should get involved in budgeting, planning and actively managing money. You can include them in family budgeting and spending and allow them to make some financial decisions for themselves.
The club has kids help plan activities, like dances, so they can see how much it would cost to hire a deejay and how much they need to charge for tickets to be able to cover the cost.
Older teens going through the Money Matters program can also help operate the "Snack Shack," deciding what kinds of snacks to purchase to sell at the club and how much to sell them for, keeping inventory and determining what sells well and what does not. Part of the money earned goes back into the business, part goes for club activities, and part goes to a charity that the kids choose each month.
"They like to give to the food bank. They like to give to the Humane Society," said Fast. "They like the idea of running a business and doing it on their own."
Fast recommends that almost every teen get a bank account. Parents can now get emails or text alerts showing when and where their kids spend money. Some kids we spoke with think that could be helpful.
"That would be very good for me, actually, because if they know what I'm buying, then I'd be more careful and think twice and think, 'Will my parents approve of this or not?' I think it'd be a good thing," said Irene.
Fast said, though bank accounts are good, parents can wait on giving credit cards to teens until they understand they should only use them to build credit, using them only when they have enough money to pay off the entire balance at the end of the month. Otherwise, they could destroy their credit very early on.
Some teens recognize the risks of abusing a credit card are high.
"I don't think a credit card is a good idea," said Miranda. "It's really easy to go overboard and get in debt that way."
The teens we interviewed are already thinking about how to manage their money better.
"I'm trying to teach myself how to do this," said Irene.
They want to be ready for money challenges, college, bank accounts, credit cards, or even just cash from their parents.
"Money is money and it's valuable," said Aryon. "Just because it's their money and not mine, I still treat the rules with respect, and I always do."
- Have your kids set their own money goals and plan how to achieve them. Allow them to set the goals for what they want.
- Talk about the difference between “wants” and “needs.” Can your child explain the difference and give examples? Would a volunteer day, helping people in need, like serving dinner to homeless people, help them see the difference?
- Have your kids re-evaluate their goals every so often, to see if their priorities have changed.
- Allow your kids to be actively involved in budgeting, planning and managing money, so they can experience the decision-making process.
- Set up a bank account for your teen. Some accounts will send parents text messages or email alerts showing where and when your child used their money.
- Hold off on giving your teen a credit card until they can understand that they should only use the cards to build credit, not to pay for things they do not have the money to buy.
Boys and Girls Club Money Matters song contest winners:
- Teen wins national financial literacy hip hop contest - Blake McGuire.
- Teen wins financial literacy hip hop contest - Syretha Shirley