What Teens Need to Learn for Long Term Financial Success

Building a Great Family means preparing the next generation to continue and improve upon the traditions and the legacy you’ve spent your life building.  Previously, we’ve discussed some of the basics to teach your children as they grow beyond the preschool age and begin to comprehend the world around them.  As they grow into teens, you can go beyond the basic building blocks and into more concrete skills that will give them a leg up over their peers in the future.

Being a teenager is tough, and without strong role models and family support, it’s nearly impossible for teens to have any kind of success.  Your kids, and in particular your teens, will learn values and morals based on the example you set and what you consciously teach them.  Teens are beginning to understand how the world really works, where each of us fits, and how to navigate the challenges that come about.  Without parents actively guiding them, teens will often learn exclusively from their peer group.  In fact, even parents consciously teaching them will be only a supporting role to what their peer group teaches them!  Nonetheless, talking about your values while setting a good example will be very impactful.

It’s time to build off the foundation that you began when they were young: a strong character, how to find answers themselves, and having social and spiritual strength.  It’s time to teach your teens the value of both hard work and smart work.

Working Hard

Working hard is the first step in the process, because without hard work, attempting to teach anything else will be a waste of your time.  Continue first with the character building that you’ve spent much of your time doing.  Focus on the idea that Josh Shipp, a youth speaker and author, puts forward: “You have to do what you have to do so you can do what you want to do.”  This concept is important to teens and adults alike.  Without building your base by doing what you have to do, there is no way to live your life the way you want to.  Teens need to learn to work their butt off and not take short cuts.  There is no such thing as a job that’s “below” them, so do what you can to get rid of their entitlement.  In fact, one of the best ways to know that you don’t want to work crappy, low-wage jobs for the rest of your life is to work a few crappy, low-wage jobs when you’re young!

The first step is to get them pitching in around the house.  Parents are not their kids’ servants, and since your teen lives in the family home too, they are also responsible for its upkeep and maintenance.  Where age appropriate, they should be pitching in around the house on a day to day basis.  At the very least, have them work alongside you while you’re doing the hard work of maintaining your home.  Recently, I put up a garden shed on our property.  This entailed digging out a 10 by 12 foot hole that was a foot deep, hauling away dirt and rocks, laying gravel and cinder blocks as a foundation, and putting up the walls and roof.  It was an incredible amount of work (in particular, digging out the hole in the ground for the foundation by hand), and my boys were there by my side most of the time.  Were they much help?  Of course not; they’re still young.  But they saw me working my butt off for a couple weekends in a row, and that itself is valuable.

We parents have a tendency to baby our kids for too long.  They can and should be taking care of themselves as they grow up, so don’t do everything for them.  They can cook, clean, and do their own laundry.  Let them.  However, as you give them more responsibility, you also have to give them more of a say in how things get done.  So long as the task gets done, there are a number of ways to get there that may not be the way you would have done it.  Nothing is more demoralizing than the phrase “Do it this way, because I said so.”

Beyond work around the house, helping them get a paying job will have huge benefits.  Year round jobs may be asking too much, but at the very least, most kids from age 14 on can get a summer job somewhere.  Explain to them the reason you want them to have a job and discuss your experiences.  Remember, nothing is as motivating to better your lot in life than a crappy job.  These first jobs will give them a taste of the real world, and force them to learn to work with others who may be older or from a different background, as well as giving them some experience working for a boss other than you.

Finally, while most wealth building habits fall in the working smart category, there is no better way to build wealth than having a strong work ethic.  Teach them the power of earning a paycheck and saving a healthy chunk of it.  Provide them with strong incentives to do so.  Begin explaining the concept of Financial Independence, as this may be the first time they realize that the working world isn’t necessarily where they want to spend the next 40-50 years of their lives.

Working Smart

While hard work is crucial to success, smart work will help our teens better navigate the world in front of them.  The first thing to teach here is the concept of goal setting, positive habits, and process building.  From these, all else will come.  It’s important to keep your kids focused and building the right life habits.  Go beyond simply studying for the test or doing homework in the evening.  Look to build processes for a healthy life, continuing to learn beyond what is taught in school, and interacting well with others beyond their current clique.  Discuss with them what they want their life to look like in the near future and beyond.  They may not have a clue as to what they want their life to look like in their twenties and thirties, but you can help them figure out the processes and habits to achieve their near term goals.  Help them understand that they can and should dream big, but that they need to figure out the small stuff to get there.  Focus on the steps to get them from A to B to C and so on.  After all, big projects are really just a series of little projects.

From there, work on improving their “human capital”.  They’ll need to learn the soft skills that will be so valuable in the future, such as working well with others, setting goals and achieving them, and adding value to a larger group.  Continue to focus on their character.  Teens have very specific character needs, as they have to deal with bullying, lying, and disrespect.  Use teachable moments as they arise (they come up all the time) and continue to set a good example.  Family culture is one of the best building blocks for strong character.  Get them out in the community and working with others.  Teach your teens networking skills, and use community events or other group activities that allow them to work with a variety of people.  Help them understand that finding the right answer is often as easy as finding the right person to ask.

Time management skills are some of the most underrated soft skills.  Give your teens the basics about how to plan their time and use it efficiently.  Focus on blocking out time for priorities, such as school, family events, studying, and even time with friends.  Help them learn to be smart about screen time.  Screen time can be productive as well as wasteful, but it can also form dangerous habits.

Once you’ve discussed goal setting and improving soft skills, you should then get into the financial basics and even some higher level financial topics.  Kids understand more than we give them credit for.  Discuss things such as inflation, stocks versus bonds, the importance of savings rates and the basics of Financial Independence.  Often, the best example is you, so use radical transparency in your family.  Have them help you pay the bills, watch you do your monthly income and balance sheets, or follow along while you invest your wealth.  For example, we go through our family finances in detail each month at one of our family meetings.  Talk as much as possible about what you’re doing and why – don’t keep it in the dark like most families.  Promote a curious mind, but teach them to be a little cynical about sales pitches, and to confirm everything, even the finest of details.  Then, you can begin to get them on a budget and discuss big issues such as saving and financing a college education.

Finally, don’t hide your teen from the world.  It will do more harm than good in the long run.  Teach them how to properly use the internet and how to be careful about predators and scams.  Let them know it’s okay to say no when needed, and often, it’s the best course of action.  Help them choose their friends and peers wisely, as this group will likely be much more impactful than you.  Finally, teach them to at least listen to their instincts.  They may not provide you with the right course of action, but they’re there for a reason.

It’s Our Responsibility

Getting our teens ready for the world is our responsibility.  Don’t shirk it.  Being a teen is tough, but you can be the person they look to during turbulent times.  Hard work and smart work will be the key combination they need to succeed in the future.  Find ways for them to help you with a difficult project.  Give them appropriate responsibilities around the house, and push them to find a paying job once they get old enough.  From there, focus on teaching the skills they will need for working smarter.  Goal setting and process building, as well as soft skills such as working with others, finding the answers themselves, and time management will set them up well, regardless of their chosen path.  Once those are in motion, you can begin to teach them a basic financial education.  No one else will, and these skills are one of the biggest determinants of success.  Finally, don’t hide your teen from the world.  Instead, give them the tools needed to help navigate it.

Keep building my friends.

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