Perhaps it’s a byproduct of time on social media, more schools teaching personal finance classes, a simple desire to “have nice things” or a combination of all of the above, but the fact is teenagers are increasingly interested in finance and accumulating money.
That’s good news for parents because the earlier good financial habits and lessons start, the better off children will be when they become adults. Building strong foundations of personal finance can truly set kids up for life even the parents aren’t wealthy in a monetary sense.
However, many parents – and this is true across socioeconomic backgrounds – struggle to start financial conversations with their teenage offspring. Likely making matters worse is the fact that many of today’s parents are themselves the children of parents viewed conversations about money as taboo. Looked at differently, many of today’s parents lack the foundation to provide financial foundations to their own kids.
For advisors and parents reading this, don’t fret because what follows are some tips on talking money with your teens.
Know Their Interests, Motivations
The Schwab Teen Investing survey provides advisors and parents with a framework for discussing financial matters with teenagers. One of the interesting points in the survey is that it says 70% of teens are interested in investing – good news to be sure.
“Their top motivation is to get more money (45%). But they also see it as both a financial and educational opportunity, with 34% wanting to invest to pay for college and 33% wanting to learn how money and investments work,” notes Schwab.
Knowing that a teenager is interested in financial markets is only half the battle. In order to have productive conversations, parents need to know what asset classes, industries, etc. appeal to their teens. The table below, courtesy of Schwab, includes an interesting mix with some surprises and areas of intrigue that are predictable.
Chances are many parents are already engaged with AI stocks or funds. Likewise, the food and drink category is an appealing conversation starter for parents with investing-interested teens. Look at it this way. Your teen may be a devoted consumer of energy or soft drinks or snacks, but they probably don’t realize that they’re too young to be heavily exposed to the slow-growth consumer staples sector.
Parents Want to Be Teachers
In what represents more good news for the financial futures of today’s youth, plenty of parents want to have related conversations with their teens. That says they’re not daunted by the subject matter and they’re up to the task.
Sticking with that theme, there’s room here for advisors provide value-adds in the form of equipping parents with the strategies and tools needed to have these talks with their kids. Data confirm the demand is there.
“Seventy-three percent of parents believe it is very important for teens to learn about investing,” adds Schwab. “For parents, the desire for their teens to learn about investing is about teaching financial responsibility (69%), giving them a financial head start (65%), and ensuring they learn important financial concepts like growing wealth over time (64%). To many parents, investing is a life skill they want their kids to learn early.”
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