Having money conversations with your teen can be overwhelming — especially if you’re not sure where to start. However, once you understand some of the basic conversations to have, you may find that it isn’t as difficult as you thought. Setting intentions and outlining what you want to get out of the conversation can also be helpful.  

Must Have Money Conversations with your Teen

Before you get started read over the following tips to help you navigate the money conversations with your teen. Remember to take a deep breath,

Below are 3 must-have money conversations with your teen before they’ve left the nest. 

1. How Money Works

When talking about the basics of money, you’ll want to discuss topics like how to earn and save money, as well as what kinds of jobs are available at different ages. You may also want to talk to your teen about how careers help you feel fulfilled, while also allowing you to earn money in future years. 

Consider talking with them about taxes and how they can affect your paycheck, as well as why you need to pay them. Once they understand these basics, move on to deeper conversations about things like inflation, annuities, and retirement. 

When discussing how money works, it’s also important to help them understand how to use their money wisely through budgeting and investing. 

2. How to Set Financial Goals 

Goals give you a sense of direction in life. Once you have a vision of what you want to achieve with your finances, you’re more likely to hit higher benchmarks. Ask your teen questions to help them get thinking about things they want in life, financially or otherwise. Here are a few to start with: 

• Where do you see yourself in 5 or 15 years? 
  • How will money help or hinder you? 
• Do you want to go to college? 
  • If the answer is yes, what kind of college do you want to go to? (community college, university, technical school, etc.)
• What are some things you want to do in your life?
  • Roughly how much money will it take to achieve those things? 

3. Credit & Debt 

Helping your teen understand credit and debt is possibly one of the most important financial conversations you can have with them. Credit can be either enabling or destructive, so it’s important they understand early on how it can affect their life. Talk with them about how credit works, how to get a good credit score, and the benefits available to those who do have a high credit rating. 

You should also talk with your teen about debt and the different kinds. Some debt is inevitable, such as debt from purchasing a home or going to an expensive university. However, there are ways to mitigate the amount of debt, like by saving early on or applying for more beneficial loans. 

When talking with your teen about money, be understanding and patient. Some concepts take longer to grasp than others. Don’t avoid having these conversations because they are difficult. One of the best ways to help your teen be financially successful in life is by teaching them early and being there for them when they mess up. 

Use the FREE Real-Life Finance Challenges Worksheet below to help you understand how much your teen knows about money before having these important conversations with them. 

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