Influence Teen Attitudes About Money to Form Good Habits

How well do your children make spending and saving decisions? The teenage years are a time of constant change, both internally and through interactions with others. One of the most important challenges facing teenagers is to adopt values that will define their decisions and behavior, especially when it comes to money.

Although it's important for parents to teach teens about how to save money and maintain a checking account, research indicates that these skills alone will not adequately prepare them to make growth-promoting financial decisions. Growth-promoting financial decisions are defined as those that will enhance or diminish the teen's financial future. One's beliefs, attitudes and behaviors about money play an important part in his or her ability to spend and live well in the future.

Teens have three major sources of income: family allowances, earnings from part-time jobs, and gifts they receive from relatives. With several possible sources of income, teenagers are likely to enjoy more opportunities to have money at their disposal.

Researchers define "internal" financial goals as those similar with personal growth and satisfaction of personal needs. "External" financial goals are obtained when teens are rewarded or praised by others. When you're young, these goals and habits, whether good or bad, are formed. There's a lot of negative role modeling going on, and teenagers receive mixed messages about money from their parents and peers.

Recent research reveals insight on teen money attitudes at different age levels. High school students surveyed about the meaning of "living well" said it involves working, getting an education, having a family, doing things together, owning a home and being a supportive part of a community. For middle school students, living well means looking good (physical and personality characteristics), going places (status activities) and being cool (wearing the right clothes). Social appeal was most important with middle school students, while the high school students' aspirations regarding fulfillment were most important.

Researchers define external living as living in ways that promote an unwarranted trust in money -- a trust that money can buy things, and that by having the right things, you can have happiness and the good life.

Parents need to continue to teach their children money management skills and establish practices that will help them secure a financial future. Teaching budgeting and saving is important, but children will be more successful at living well by not focusing on external financial goals that promise the negative aspects of financial education. Instead, they should learn to focus on financial goals that promote highly valued internal aspirations.