Money Lessons Teens Must Know To Be Happy | Brian Ursu | Episode 151

When we’re asked what we want for our kids, parents say we want them to be happy. The thing we don’t think about is the role finances play in that. There are money lessons teens must know in order to live life on their terms, meet their goals, and follow their dreams. What do they need to know? What lessons should we teach them? Mighty Parenting podcast host Sandy Fowler interviews Brian Ursu to answer these questions. They look at what our kids need to know besides budgeting and how we can help them

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A Favorite Quote from the Show: 

Mistakes are the low-hanging fruit when it comes to giving our kids a financial leg up.

High Points From Our Conversation About Money Lessons Teens Must Know to be Happy:

The greatest part of wisdom and the greatest part of success in any arena is reducing mistakes.

The of secret financial well-being is eliminating as many of those mistakes as you possibly can.

One of the big mistakes is not understanding credit cards. Our children start receiving offers in the mail as soon as they enter college but they don’t understand the implications of having the cards or how to use them appropriately. 

There’s a moment in time where our kids have the opportunity to make many large mistakes that can really put them in a financial hole.

We need to allow our teens and twenty somethings to make their own choices and mistakes. What we want to do is foster the idea that we’re a trusted source of information. Having those conversations about adult things and finances throughout the tween and teen years will lead to more conversations when they do move out of the house.  Now you are not just a parent, you are a source of information that has their best interest at heart.

The most impactful financial area is debt. Minimizing and eliminating that as early as possible provides all kinds of opportunities for them to have flexibility to move around in their world later on.

One money lesson teens need is about accumulating student loan debt without an endgame or a career path to pay off that debt. This creates a really steep hill for our kids to climb in their 20s and 30s.

A common cause of credit card debt is our kids moving out but wanting to continue the lifestyle their parents have provided for them. They take on debt rather than sacrifice the life stye. Oftentimes, kids don’t even realize their parents didn’t start with that lifestyle. Sharing family stories can help our kids shift their expectations.

One of the money lessons teens must learn is sacrifice. Our kids find it difficult to sacrifice. For example, they want a particular car or a spacious apartment. These are areas where they can make a different choice that impacts their discretionary income.

When it comes to teaching our teens money lessons, go for the low hanging fruit.  Some of the areas our kids can quickly save money include: choosing a different apartment, type of car or even not having a car, gym memberships, lattes, etc. These are things that take money away from your future self.

Help kids look at both their current self and future self and learn to be kind to their future self.

There was a study of people starting a new job who were considering a 401K contribution. Participants used an app to create an image of themselves when they’re older. When they saw themselves in their older years, they increased their contribution by a huge amount.

Einstein called the magic of compounding interest the 8th wonder of the world. Everything our kids put away now has more power than money they put away later.

In our shaky economy, it’s more important than ever to think long term.

Step one of sustainable living is to not spend more than you make. Then create habits and a lifestyle that are lasting and sustainable. There may be a season where you will borrow more but it’s a season, not a lifestyle.

Millenials and Gen Z are very dialed into the environment. Sustainable investing and social investing are very popular and can be motivating for our kids.

Having the knowledge to make good financial choices up front allows our children opportunities that are important to them.  Maybe they want to donate to a cause or take time off work to give back. But those options aren’t available if they haven’t made good financial choices. 

Retirement is evolving. Our lives used to have 3 distinct periods of time that were very linear; go to school, work, then retire.  Now life is evolving and you may move in and out of work and school and even take time off from both to do something else for a period of time. 

Now What is helpful for people who find themselves in transition, particularly people going through a divorce or death of a partner.

Resources:

Now What: A Practical Guide to Figuring Out Your Financial Future

Unmotivated Teens Shift Gears When They Find Purpose | Tim Klein | Episode 146

The Power Of Agency To Turn Teens Around | Anthony Rao | Episode 141

How To Build Self-Confidence In Your Teenager | Dr. Melanie McNally | Episode 129

Motivating Teenagers And Helping Them Reach Goals | Adam Norse | Episode 105

Our Guest Brian Ursu:

Brian Ursu has helped clients meet their financial goals for more than 30 years. He has worked in large financial institutions, at a major wire-house brokerage firm, and now in his own wealth-management firm, Intentional Wealth Advisors LLC. His focus is on education as well as client service. He lives in Northern Lower Michigan near the bayside community of Traverse City.

To learn more or connect with our guest visit http://brianursu.com 

Our Sponsor:

Brian Ursu, author of Now What: A Practical Guide to Figuring Out Your Financial Future. Brian shares real-life financial advice to teach money lessons teens and twenty somethings must know to help them live happy with a sound fiscal future.