Ah, the tender teen years, when children blossom into miniature adults with pint-sized knowledge of the real world and ocean-sized attitudes. Sound familiar? If so, you know this is also a vital time for cultivating ideas and planting seeds that can fruit into great orchards later in life. Much as saving early has its rewards, the advice you give today can reap dividends in the decades to come—and perhaps for generations.
We asked several members of our team to share their parenting, financial, and life lessons, because nurturing healthy habits in teens or teen grandchildren can take a village.
Establish Solid Principles for Achieving Financial Independence
I made it a point to convey the following principles to my children as they began their quest for financial well-being:
- Pursue a career that will provide not only a comfortable living but also something you’re passionate about and that contributes positively to society.
- Establish and maintain good credit, and know the difference between good debt and bad debt.
- Save and invest early in a Roth IRA and/or company Roth 401(k) account.
- Take full advantage of company matches, if available.
- Diversify your investments across and within asset classes; rebalance annually.
- Stay disciplined in managing your investments, and don’t get caught up in fads or news headlines.
- View money as the means to an end, not as an end in itself. Think long and hard about choosing worthy ends.
Barry Cohen, Sr. Wealth Advisor and father of four (ages 31, 27, 27, and 25)
Resist the Urge for Instant Gratification
It’s easy to tell your kids to save money, but without life experience or practical saving methods, it may not happen as early as desired. Teaching the importance of saving is even more difficult now because anything can be purchased with a click or a tap. What’s more, these digital transactions make money seem intangible. The instant-gratification generation is real. Because of this, we built our kids’ learning around credit cards with preset limits, which helps them learn to manage and save money.
Jennifer Searle, Local Marketing Manager and mother of two (ages 24 and 11)
Instill Entrepreneurship
How many times do you hear “Mom, will you buy this for me? Pretty please, Mom!” With four daughters in tow during Target runs, I found myself being bombarded with this question. So I decided to equip my kiddos with the skills they needed to buy what they want—cue the classic lemonade stand.
The girls bought their supplies with a loan from us, marketed their product and pricing, and even made transactions easy with a Venmo QR code. They were thrilled to be serving customers, earning money (and tips), and sneaking the occasional quality-control sample. They learned about cost controls, customer service, profit margins, supply and demand, and money saving. Most of all, they had fun. Now when we go to Target, they consider the value of an item they want and contemplate whether it’s worth their hard-earned money.
Laura Combs, Managing Director and mother of six (ages 10, 8, 5, 3 and 7-month-old twins)
Encourage Teenagers to Invest While Learning
We gifted money to our children for investing in three individual stocks during high school. They learned firsthand the fundamentals of investing, impacts of market volatility, and nuances of different investments.
When our son and daughter were each born, we funded UTMA investment accounts for them with “seed money.” They are both teens now and have learned, through experience, the basics of how investments work, how the markets are always moving and the power of compound interest over time. As a result of this, both of my kids believe in disciplined investing because they have already seen it work for them… and the best part for us is that Mom & Dad didn’t even have to try to do any convincing!
Brian Jellig, RVP, Wealth Advisor and father of two (ages 14 and 18)
Embrace Technology—with Money Management!
We live in an increasingly digital world, and it’s becoming crucial for our kids to understand electronic payments. My kids are too young now to grasp the digital concept, but I’m constantly brainstorming ideas for how to teach them to manage money digitally.
Laura Cuber, Wealth Advisor and mother of two (ages 5 and 4 months)
Continue Building Financial Knowledge
Working in the financial services industry has taught me how uneducated and unaware even the smartest people can be about money. I want to make sure that doesn’t happen with my children. Since I want them to have an opportunity to do whatever their hearts desire, they must learn to plan for the money they’ll need.
Haana Frank, Sr. Financial Planning Analyst and mother of two (ages 4 and 2)
Give the Gift of Purpose
After our kids graduated from college, we began giving them funds at Christmas in lieu of clothes or gadgets. We separate these funds into two buckets: one for immediate use, the other for major goals and future purchases (such as a house or car). Also, the second bucket is funded only if they’ve volunteered that year for a worthy cause in the community.
Dan McDermott, Sr. Wealth Advisor and father of three (ages 30, 27, and 25)
Be a Good Steward of Wealth
My goal was to show my children how “wealth” could provide more than sodas, snacks, and video games, so I matched their charitable donations to an international humanitarian-aid charity for several years. I wish I’d done more of this, and been more consistent in providing everyday examples during their journey to adulthood. Try to not shy away from conversations about wealth, and try to find tangible ways of showing how good stewardship of wealth can benefit others.
Geoffrey Franklin, Wealth Advisor and father of two (ages 21 and 18)
Don’t Be Afraid to Lose Money
I’ll pass on to my kids what I learned and value from my parents: Fewer risks can often mean fewer rewards. Consider investing in things you believe in and are passionate about.
Jojo Cresci, Sr. Wealth Advisor, Director, and mother of two (ages 2 and 1)
Provide Lifelong Guidance
My kids are now grown adults, so the conversations are very different. I talk to them about emergency cash-reserve funds, budgeting for home improvements, contributing to an IRA, and employer retirement plans. We also discuss good debt and bad debt. I recently sat down with my daughter, a first-year teacher, to create a strategy for investing in her 403(b) plan and paying down a small student loan. We assigned a place for every dollar.
Tracey Turko, Sr. Wealth Advisor, Senior Director, and mother of two (ages 32 and 27)
Teaching children about money isn’t easy: it requires time, practice, and patience. You could have a powerful impact on the financial stability of not only your children but also future generations. Mercer Advisors champions its role as a guide for building generational wealth in your family. To learn more, contact a Wealth Advisor.
Know someone who has younger children? Check out Part I, Nurturing Healthy Financial Habits in Your Kids (or Grandkids) here.
