3 Financial Literacy Lessons To Teach Your TeenagersAugust 3, 2023
Written by Matthew Lindenberg | SVP / Chief Marketing Officer
I have young teen twins who have started to become interested in money, saving, and even the economy. I’ve learned a few key lessons from the questions and interactions with my kids, which I thought might be useful for other parents out there.
Lesson 1: Get Them Involved
The first lesson came right as I joined Kearny Bank. My kids were enthusiastic cheerleaders for my new career opportunity and wanted to hear all about my new company. But it was when I told them that we had a Kid’s Club Savings Account, a kid’s savings account that was designed specifically for school age kids like them, that they got really excited. They had recently received some generous cash gifts from family, and immediately asked to open their own accounts. We took them to our local branch, and they loved meeting our local Retail Relationship Manager. Every month they review their bank statements as soon as they are ready. And of course at the end of each marking period they want us to rush to the branch so they can be rewarded for their A’s (plus it’s something to remind them about to make sure they study!). Getting them involved from the beginning has helped them to be more knowledgeable about their own beginning finances, and I think has set them up with an early sense of discipline about how to handle their money.
Lesson 2: Teach the Benefits of Saving – and Spending
That said, as much as they both had similar eagerness to get their first accounts set up, the second lesson comes as I watch them behave differently in how they spend. Both kids get a biweekly allowance for them to use at their own discretion. My son is a saver. While he’ll treat himself to a piece of candy or a sports drink from his favorite YouTube influencer, he almost never uses up his full allowance, and instead watches his savings grow. He has even asked to begin investing some of his money, hoping to grow it for a dream car in the future; this has led to good conversations about investment strategy and diversification. We’ve also reminded him that it’s ok, as his budget allows, to use some of his money now when he’s out with friends or looking for a treat.
On the other hand, my daughter is a spender. She’s a bit more of a social butterfly, spending time with her friends in my small town’s central business district. On a given weekend, one might find her at the movies, a local Starbucks, or one of the other shops or quick serve restaurants. She almost always has spent all or most of her allowance before she receives her next one, and we’ve had to help her stay out of early debt by declining advances on her next allowance. We’ve tried to create teaching moments for both of them based upon their individual approaches – for my son that has been a balance between introducing him to investing while also letting him know that it’s ok to spend some of his money, while for my daughter it’s been trying (with some futility!) to teach her about the idea of saving for a rainy day.
Lesson 3: Engage with Their Lessons and Questions
The third lesson has come from engaging in great conversations as they begin to open their eyes to personal finance and economics. This year in their Social Studies class, they participated in an interactive budgeting project. They had a random drawing for jobs and income, and based upon that had to make key decisions (Where would they live? What transportation arrangements would they make? How much did they need to spend on essentials like food and utilities? How much did that leave for entertainment?). Each day they shared the latest choices they had faced in class, and we had good discussions about the decisions they had made and their reasoning. More recently, they’ve heard in the news announcements about interest rates and companies slowing their hiring, and they asked me what they had to do with each other. What a sophisticated question! I was impressed that they had thought to ask about this, and we had a good conversation – I was careful not to let it get too long or boring! – about the relationship between higher interest rates and slowing business investments, including hiring. Both kids were engaged and interested. By participating in these conversations, I learned how important it is not to be shy about engaging them on these topics; they’re hungry for knowledge and have no patience for dismissive answers like “it’s too complicated.” Albert Einstein famously said, “If you can't explain it simply, you don't understand it well enough.” If they’re asking tough questions, let them know that you’ll do some research and then come back later with a more complete answer.
I’ve learned a lot about financial maturity from my kids this past year. They are eager to get involved with their money, have very different approaches in terms of how they use it, and have a tremendous appetite to learn how it all comes together in the world around them. One thing has become particularly clear: they may be young teenagers now, but I only have a few years to help them with the tools to be ready for increasing financial independence as college students and then young adults. I don’t know that I have all of the answers, but I hope that the lessons I’ve been learning can help other parents also prepare their kids for their amazing lives ahead too.
Matt Lindenberg is SVP/Chief Marketing Officer at Kearny Bank, where he oversees the bank’s marketing efforts. His background includes financial services, retail and e-commerce, with a focus on using data and analysis to develop key business insights, then execute action plans. Matt previously held roles at Epsilon (part of Publicis Groupe), Toys”R”Us, Amazon.com, American Express, and Deutsche Bank. He earned an MBA from New York University’s Stern School of Business and a bachelor’s degree in operations research and industrial engineering from Cornell University.