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How to Talk to Teens About Money & Debt Over March Break

If you have a teen at home, you likely have a lot of expenses — extracurricular activities, clothing, triple-digit grocery bills, not to mention all the tech that goes with growing up these days. All those costs can mean a lot of debt for a family.

Those last few years before teens head out on their own offer parents all kinds of opportunities to teach their kids how to manage expenses, avoid debt and set financial goals.

Talking to your teens about how you manage your own expenses or deal with debt helps them to learn. It also helps to include them in family financial decisions — a timely example would be March break spending.

Start with the financial literacy basics

Financial literacy is a life-long pursuit. As your child moves from one phase of their life to the next, you can tackle increasingly complex financial topics with them.

Start by introducing some of the topics most relevant to them now:

  • Creating a budget
  • Setting savings goals
  • Applying for student loans
  • Using a credit card
  • Learning how interest rates affect debt

Financial planning should be a cornerstone of your discussions with your teens. They’re old enough to participate in family and personal financial planning.

Spring break is a good opportunity to get the conversation going

In our 2017 March break spending poll, we found that 72 per cent of parents planning spring break activities intended to use savings and cash to do so. That’s good news. It means not taking on any debt. It also means that parents have to plan to avoid debt.

March break offers a number of teachable moments for parents of older teens:

  • If you’re planning a vacation or family outing, let your teen take a more active role in planning activities. Provide them with a budget and let them research activities that stay within your spending parameters.
  • Test the waters with a lump sum payment to your teen as a spring break spending allowance. Letting them manage their own spending money provides a valuable money lesson.

Dig deeper into the minimalist way of thinking over March break

Life is expensive enough without adding non-essentials to the bill. Teens and young adults are big consumers and big targets for companies.

If you’re spending family time with your teen during March break, take the opportunity to talk to him or her about the benefits of a minimalist lifestyle, and the downside of consumerism and debt.

Help your kids learn to recognise the emotion and the motivation behind their purchase behaviour — and the motivation behind the seller’s behaviour. They’re more likely to think twice before overspending.

Luckily, the minimalist way of thinking (and living) is popular now. Having less material clutter and following a minimalist lifestyle can help ward off debt.

When times get tough, you want your teen to be ready to problem solve. Offer them real life money lessons, but also make sure they have room to practice. It takes time to find money and debt management strategies that work for each person. Most importantly, try to keep the conversation with your kids open as they move through trial and error to success.

What tips to you have for teaching your teen about money? Share your ideas on Twitter #DebtSolutions #ParentingTips  #FinLit

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