Learning how to manage money is important for people at every age and stage of life, and the lessons that we teach our children now in relation to good money habits can enrich them as adults. Research shows that many of our attitudes and behaviours are entrenched in our subconscious before we reach our teens – and our attitudes and behaviours towards money are no exception to this.
The teenage years are commonly portrayed as being a very challenging phase of parenting.
Hormones, peer pressure, moodiness and lack of motivation are a few of the traits commonly cited as being typical teen behaviour. Parents sometimes approach these years with a sense of trepidation.
But take heart – according to recent research1, parenting a teenager is not half bad!
"In actual fact our research found that seven out of 10 Australian teenagers feel that they have a positive relationship with their parents," says Diana Smart, a psychologist and General Manager of Research at the Australian Institute of Family Studies.
"Overall, most teenagers felt their parents respected them, understood them, accepted them, and trusted their judgment, so all-up that's a pretty good result."
The research to which Ms Smart is referring, and which she has co-authored, is called How Do Parents and Teenagers Get Along Together? Views of Young People and their Parents.
The research is based on a long-term study, the Australian Temperament Project, which began in 1983 with a group of 2443 children and parents. Two-thirds of the study's sample group is still involved.
"That doesn't mean that parenting teens is smooth sailing," says Ms Smart. "Most families will experience ups and downs in the teenage years. Whether those ups and downs are on a daily or weekly basis, or whether families go through two or three bad years, will vary from family to family.
"In general, teenagers felt their relationships with parents improved from their early-to-mid adolescence years to later teenage years."
There is a strong benefit (beyond a more harmonious household) in having a positive parent/teenager relationship.
"Where teenagers and parents both reported a high quality relationship, the teenagers had better social skills, fewer behavioural problems, better peer relationships, and fewer problems at school," says Ms Smart. "They also had higher self-esteem and were more optimistic about their future."
Ms Smart suggests the following ways for parents to foster a positive relationship with their teens:
1. Being there
It's important to let your teenagers know that you are there for them, that you have time for them, and that you are interested in their daily activities. Often it's the little things that are important, such as knowing who their friends are, and chatting about what happened at school that day.
2. Provide affirmation
While it may not always seem to be the case, research shows that teenagers are seeking affirmation from their parents. They want to know that their parents are proud of them and recognise their achievements.
As our children get older and approach something more akin to equality with parents, it can be difficult to adequately supervise their activities. Finding a balance between interested involvement and 'policing' is a challenge; however, it is worth the effort.
When it comes to setting house rules, sometimes less is more. With rule setting, a conscious judgment needs to be made about what is important and what isn't. Some teenagers will push their parent's boundaries, so parents need to make a judgment as to what is worth having a confrontation about and what isn't.
5. Be consistent
When boundaries have been set, it is very important for parents to stick to those boundaries consistently.
The habits listed above will hold parents in good stead when helping their teenagers develop good money skills.
"Money issues are just like any other learning issues," says Ms Smart. "We can teach our kids by our example, we can talk to them about financial issues as they arise, and certainly can supervise and set boundaries about expenses such as mobile phones."
The Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA) has outlined the financial issues that they feel are relevant to Years 7 and 9 students in their consumer and financial literacy framework.
In Year 7:
'Students understand the need to plan for the future and have a more detailed understanding of the use of income. They apply critical literacy and numeracy skills to a wide range of commercial advertising and consumer situations, and analyse the potential effects of these on personal finances'.2
In Year 9:
'Students are able to distinguish between wealth and income, and are aware of the different sources of income and wealth creation.
They are able to keep simple personal financial records, and establish short and long term financial goals.
They make appropriate choices in relation to the variety of financial services, and are also aware of the financial advice available within the community to assist decision-making.
Students use basic financial information to assess risk and returns in a local, national and global context.
They apply critical literacy and numeracy skills to consider different forms of investments, and the advantages and disadvantages of fundraising activities or business ventures'.2
Tim3 has been a secondary school teacher in SA, for more than 29 years. Teaching Years 10-12 he is well aware of what makes teenagers tick.
"Teenagers face enormous peer pressure from about 15 years of age onwards," he says.
"Brand names become extremely important. No one wears Dunlop Volleys anymore or Bonds T-shirts – they all want $200 sneakers and Mambo T-shirts. Branding is really important to kids and in a sense gives them their identity. It's an extraordinary market."
Tim strongly supports a high level of parent/teenager communication but doubts in terms of money that it is happening very often.
"I was reading some research5 recently, which reported that the average father is in the presence of his teenager for less than half an hour a day," he says. "And given that the father is often the main breadwinner, I doubt there's too much meaningful financial conversation happening."
Tim advises that, like their younger peers, teenagers learn most effectively by being able to relate a lesson to a real-life situation.
"We run a subject called small business management where the kids have to set up and run their own business for six months," he says. "They have to learn about marketing, running costs and profit margins, and at the end of the time they have to provide a set of reports detailing the operation.
"We also talk to them a lot about what inflation means. We use real-life examples to talk about what is recession, what are share markets, what are the implications of economic progress."
Tim suggests that parents make a conscious choice to involve their teenagers in more of the family discussions around finances.
"Generally teenagers are very unaware of anything but themselves," he says, "so they are probably not pushing themselves forward to be involved in family discussions.
"Also, parents want to make sure that their kids are okay and protected, and so tend to shield them from any financial dramas or stress that is going on. When it comes to general budgeting issues though, kids could learn a great deal from being involved."
A recurrent theme throughout these articles has been the unanimous support from teachers and experts for ensuring that children earn their pocket money through chores.
This also holds true for this age group, particularly once they are ready to branch out into forms of paid employment other than domestic chores.
"While most teenagers have a good appreciation of the idea that money can provide them with the things that they want, many of them have no idea how hard they have to work to earn a significant amount of money," says Tim3.
"Once teens get part-time work though, they develop a much better appreciation for the effort required to earn a reasonable amount of money, and they quickly learn the value of money.
"The best thing you can teach your kids is that if you want to spend money, you have to do something to earn it, whether it's having a part-time job or doing chores. And if you want to spend a lot of money, you have to save.
"In the classroom we teach them about credit but with teenagers, until it's happening to them, they don't really get it.
"So drumming a good savings ethic into them at this stage, before they get involved with credit cards, is invaluable."
1Diana Smart, Ann Sanson and John Toumbourou, 2008, How Ddo Parents and Teenagers Get Along Together? Views of Young People and their Parents, Australian Institute of Family Studies
2Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA) National Consumer and Financial Literacy Framework: www.mceetya.edu.au
3All teachers interviewed for Teaching Children About Money are previous recipients of the NEiTA 2008 ASG National Excellence in Teaching Awards: www.neita.com.au
4Australian Bureau of Statistics (ABS), 1998, How Australians Use their Time 1997, Catalogue No. 4153.0, Canberra