Teenagers have no idea what things cost. When they're very young, there's no difference to them between the cost of a candy bar and the cost of a video game. To take things one step further, there's no difference to them between a low-priced video game and a high-priced one. Price is meaningless to them.
Older teenagers may know what things cost, but they may have little idea about whether they're getting value for their money. They may know that a pair of sneakers costs $100, but are they worth the money?
That's why it's important to help your child understand what things cost and whether there's value in that cost. There are several ways you can do this.
- Give your child an allowance. Nothing teaches kids quicker about what things cost than by giving them their own money to spend. This decision-making freedom allows them to get the feel of prices. Allowances are discussed in How Much Allowance to Give.
- Shop and talk. When you're out shopping with your child, show him price tags. Point out when things are costly or not. In KayBees, I overheard a parent telling a young child that a particular game cost only $8. The parent said, “This is a good buy.” Explain about discounts and sales.
- Let your child read up on things. Zillions, the Consumer Reports magazine for children, can help kids become smart consumers. This magazine helps them see through ad hype and make informed decisions.
- Get schools to educate kids about commercialism and ad propaganda. The Consumers Union, a nonprofit organization that publishes Consumer Reports, advocates making schools ad-free zones and taking other initiatives to education our children.
Necessities Versus Luxuries
As a parent, you know that the weekly grocery bills are necessities, while dinner out on a Saturday night can be classified as a luxury (even though you may feel like you need it). This distinction between what you can't go without and what is only icing on the cake is something that you've learned.
But your child may think that getting a new wardrobe every season is essential. This thinking isn't confined to your elementary school child, either: Your teenager may still harbor this belief. In her mind, getting the wardrobe may help her social standing with her peers, but you know that it isn't a necessity. Having a pair a shoes that fits and a warm winter coat are necessities.
Understanding this distinction while kids are young will help them make good decisions on how to spend their money when they're older.
Help your child to learn the difference between what he needs and what he might want or wish for by letting him make a list. In the first column, have him list the things he requires; in the next column, have him write down all the things he may desire. (Some hints on necessities in addition to rent, food, heat, and telephone include school, doctor's visits, medicines, and clothing.)
Money Matters Workbook for Teens (ages 15-18)
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