Youth and Money

Frequently Asked Questions:

1. Can I help my children manage money better?

ANS: The National Council on Economic Education found that many adults and teens don't understand the most basic concepts about money. Average grade: 49% of the adults and 66% of the high school students tested got an "F". The good news, according to the Parent, Youth and Money Survey , is that 94% of students surveyed turn to their parents for financial education and guidance. To help children learn effective financial lessons and skills, parents can first assess or upgrade their own understanding of personal finance and take steps to confidently talk to their children about money matters.

Should you find you need a refresher, consider taking a money management course like Taking Charge of Your Finances. Encourage your school system to contact UNH Cooperative Extension about the National Endowment for Financial Education's High School Financial Planning Program and/or the UNH Cooperative Extension's A Prime Reality: Credit Decisions and You. For younger grades (age 8 and 9 year olds) UNH offers Let's Talk About Money. Most important, know that you can make a difference.

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2. Should I give my child an allowance?

ANS: To pay or not to pay a child an allowance is a debated question. Some parents feel it is a great opportunity to learn about earning money and will assign a value to household activities for which the child assumes responsibility. Some families will assign a fixed amount (for example, $2.00 weekly) without tying the allowance to specific tasks. Children are expected to learn to manage spending and saving via hands-on experiences. Other families feel strongly that completing tasks and contributing to the family should not be tied to money. Money is provided by and managed by the parent as needed while children are encouraged to seek employment for extras.

All of these approaches could prepare children for the day they assume financial responsibility for themselves if parents and guardians are successful in helping children understand the difference between wants and needs; if they can instill the value of saving and planning for the future; and if they can develop in their children a healthy respect for the uses of debt while avoiding the misuses of credit.

Whether or not children receive an allowance, discussions and negotiations over purchases will continue to be a regular occurrence. If you can make the distinction between needs and wants and establish that parents will pay for certain items while children will pay for others, arguments or hard feelings on both sides could be reduced. Be sure to define the expenses for which you are willing to pay, such as food, clothing, shelter, and perhaps school related expenses. Your child could be responsible for games, candy, toys, etc. Maybe they want $50.00 sneakers and you can afford $20.00. You could put your $20 toward the purchase and they could come up with the rest. Once "who pays what" is defined, be consistent. It's amazing how a life-or-death purchase becomes unimportant when it's their money they have to spend.

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3. I don't like the way my teenager manages money, what can I do?

ANS: Impressions about money are formed at an early age, so if you are concerned about your teenager's money management habits, already you have to look to that child's history with money matters for clues. In Taking Charge of Your Finances, we learn that money often is pivotal to one's self-concept, self-esteem, and sense of intelligence. In his book The Emotional Meaning of Money, sociology professor Lewis Yablonsky suggests that knowing you attach personal emotions to money will give you a better understanding of the role money plays in your life and its impact on your personal happiness. Consider what emotions might be motivating your child's money management decisions.

In addition to our thoughts about money, personal values impact all financial decisions. Values are defined as standards or qualities considered important or desirable that give justification for our actions or our goals. We express our values, in part, by the ways in which we choose to spend or save our money. Research studies suggest that if parents are aware of the money management practices (positive or negative) being modeled for their children, they can encourage the learning of basic money management-saving, investing, giving, spending, earning and budgeting-- that reflects the family's values.

Once you have an understanding of your own values, attitudes, wants, and needs, the next step is to be able to communicate that to significant others in your life. It would be helpful if you and your teenager could share your perspectives with each other.

Communicating your concerns and offering suggestions is tricky at this stage in your child's development. Interactions that involve money are no exception. Itemize your concerns and present them as your observations. Explain why you are concerned and ask if you could offer suggestions. Consider resources outside your family such as how-to books or a course offered by your teenager's high school. Nationally, the High School Financial Planning Program (HSFPP), developed by the National Endowment for Financial Education, in partnership with the Cooperative Extension System and Credit Union National Association (CUNA), brings a free, comprehensive financial planning curriculum to more than one quarter million high school age students each year. Contact UNH Cooperative Extension if you would like to learn more about this curriculum. For more information on talking to your teen, obtain a copy of Living With Your Teenager: Talking with Teens.

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4. How can I learn more about kids and money?

Programs:

  • High School Financial Planning Program - Teens can participate in this curriculum through their high school, home school, 4-H Club or youth group. This series is designed to teach teens how to identify short and long-term goals, follow a written spending and savings plan, implement a financial planning process, and consider the cost of credit when making a purchase. Teachers, parents, and volunteers are welcome to attend a training program on how to utilize this curriculum into their classrooms or through their youth clubs. Cost: Free Instructors Manuals and Student Guides.


  • Let's Talk About Money for 8 and 9 years olds - Geared towards 8 and 9 year olds, this program introduces children to the concepts of establishing a savings plan, identifying needs and wants, practicing mathematical calculations, and managing their resources through spending, sharing and saving. Appropriate for parents, 4-H Clubs, youth programs, elementary school classrooms and after-school programs Cost: $3.00.


  • A Prime Reality: Credit Decisions and You - A Prime Reality is a credit simulation helping teens between the ages of 15 and 19 consider the cost of credit, verbalize the various perspectives of financial decision making, compare the cost of credit in purchasing a car, and understanding banking. This credit challenge is a good educational addition to any teen financial curriculum.

    Cost:
    $49.95 for a 16 student kit
    $64.95 for a 30 student kit

Publications:

Other Resources:

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