Ever wonder why teens are so carefree with money? It’s because teens (and younger kids) think about money in a different context than adults.
In our society, kids are not required to earn money; someone gives it to them. They don’t have to pay bills; parents take care of them. To them, money is a treat, sometimes received regularly, sometimes not.
Most adults earn their money. Consequently, an adult looks at money knowing that it pays for choices made in the past, as in, “Can I make the full mortgage payment this month and buy groceries?”
On the other hand, kids get money from parents and relatives so, to a kid, their money is for the future as in, “What will I buy at the mall today?
There’s nothing horribly wrong with this picture. As parents, we enjoy seeing our children have fun and nothing says “fun” like having money to spend. The reality is that kids and adults view money differently because they get it from different sources and have different motivations for how they spend it.
Dangerous spending habits of teens
However, when we casually dole out money to our kids, while at the same time taking care of their financial necessities, we enable them to develop freewheeling attitudes about money.
As a result, we are not preparing them for the reality they will face as adults, where they have to work and make decisions about paying their bills before they can go the mall to spend for fun.
Let’s consider getting a driver’s license. We can agree that getting behind the steering wheel is the fun activity that our kids relate with driving. However, as parents we know our kids need to learn the rules and practice the skills of driving. If not, we fear they could have an accident.
We also unconsciously know that through practice making good driving decisions our kids will begin to understand and appreciate the responsibility of having a driver’s license.
Learning to manage money also requires practice to develop skills. Without practice using money for more than just fun spending our children will not change their attitudes about money before they become adults.
Lynne Finch helps parents teach their kids about money from piggy banks to online banking. “It’s time to teach the kids how to manage money they can’t see or touch,” says the author of The No-Cash Allowance. Follow Lynne’s common sense approach for teaching children that money is a number with kids as young as pre-school through high school