For tweens and teens, there’s no shortage of stressors. Between navigating school (especially during a pandemic), family life, friendships, and boundaries — or lack thereof — with social media, life can be complicated. But there’s another cause of anxiety that can affect kids’ stress levels, and that is financial worry. In fact, with more parents than ever struggling to make ends meet as a result of the coronavirus pandemic, there’s no denying that their kids are also feeling the strain.
“Even though most teenagers are dependent on their parents and are not paying the bills, they are often profoundly affected when their parents are facing economic challenges,” Joyce Serido, Ph.D., associate professor of family social science at the University of Minnesota, tells Thrive. Right now, in the midst of so much uncertainty, “it can be scary for teens as they watch their parents struggle,” says Serido, who specializes in family finance.
Money-related stress is compounded by pressure to keep up with peers — an issue that is fueled by social media. “Teens are frequently competing and comparing themselves to others,” says Serido. “When they see friends on Instagram wearing clothes they want and can’t afford, it can be upsetting.” The good news: “Research shows that the biggest financial influence on children is not peers, but parents.” That means if you’re a parent reading this, there’s a lot you can do to abate your teen’s or tween’s anxieties concerning money.
In fact, helping children learn healthy money habits is one of the best things you can do to give your kids a sense of control and agency over their financial futures — which naturally can make the present seem less stressful, too. “If your kids see you manage your money well, and you teach them about financial concepts and create hands-on experiences for them to learn about money, this can help your kids achieve financial well-being,” Kimberly Watkins, Ph.D., assistant professor of consumer sciences at the University of Alabama, tells Thrive. What’s more, “they’ll have greater self-esteem and less stress as they get older and have to make independent decisions about money.”
Simply put, “it’s never too late to start coaching your kids so they establish healthy habits,” says Watkins. Here are seven ways to set your teens up for financial success and minimize their money stress now and for the long haul:
Don’t be afraid to talk about money
It’s not always easy, but it’s crucial, says Watkins. “If you have financial worries, your kids could be internalizing negative beliefs.” She suggests setting up family meetings with your children. “Inform them about what is going on, so they aren’t left to their own interpretations.” Studies have found that adults who had financial discussions with their parents when they were kids experience less financial stress and higher levels of financial wellness.
Just remember that listening to your kids about their money concerns is as important as doing the talking, says Serido: “If a child comes to you and says,‘I lent my best friend $20 and she didn’t pay me back, and now I’m stressed because she won’t talk to me,’” validate their feelings and gain their trust by participating in an open dialogue.
Help your kids navigate social media
“When your teen sees posts by influencers encouraging them to spend money and buy things they can’t afford, it can affect their self-esteem and increase their stress levels,” says Watkins, pointing out that kids are bombarded with advertising directed specifically at them. This can lead many teens to compare themselves with their peers who have different financial circumstances. “Have discussions with your teen about how what they see online is affecting them. Encourage them to take breaks from social media and teach them how to think critically about the messages and images they’re seeing, so they can put things into perspective.”
Encourage kids to earn their own money, too
Getting a part-time job, like babysitting or dog-walking (as long as they can do it safely during COVID-19), is a great way for teens to become financially literate, and it will help them take responsibility, says Serido. “When they work for their own money, they may think twice before buying that video game!”
Involve them in family finances
“Many college students I work with are stressed because they don’t know where to begin when it comes to money,” says Watkins. To help kids become more financially independent, she suggests giving them age-appropriate projects, “like planning the family’s meals for the week, within an allotted budget.” Also, pull them into family budget meetings so they can understand why you make certain financial decisions.
Teach your teens the art of “smart spending”
It’s important for teens to develop discipline, says Serido. “Self-regulation is one of the strongest predictors of financial well-being in later life. That requires patience and knowing the difference between needs and wants.” She recommends helping teens set their priorities in line with their goals and values so they save for what they really want, rather than being driven by in-the-moment impulses.
Serido, who coached her own (now adult) son to look for bargains, used this strategy to teach smart spending: “I said to my son, ‘Here’s the money for you to buy what you want. If you get a good deal, you get to keep whatever money is left over. If it costs more, you have to add to what I’ve given you with your own funds.” No surprise: He got very good at finding deals. “Provide opportunities for them to make small decisions to feel good about themselves. If they go wrong, that’s your opportunity to redirect them. We learn from doing, not from being talked at,” notes Serido.
Consider a bank account
“Helping your teenager open a bank account and get a debit card will encourage them to learn about responsibility,” says Serido. “You can explain what an A.T.M. card is and how having it is a privilege, and you expect them to use it responsibly.” This may include tracking their spending and reviewing bank statements. “When they make a mistake (because they will), show them where they went wrong and what they could do differently.”
Demonstrate your family values, like giving and gratitude
Children learn from what they see us doing, says Serido. “If you live within your means, your kids are likely to do the same. Likewise, when parents donate their time or money to community centers or their favorite causes, they show their kids that it’s important to not only take care of ourselves, but take care of others, too.” Your teens will likely start to see that this spirit of giving pays back in the long run — research shows that people who give tend to be happier and healthier.
“Get your teen or tween to list the things that are important to them and what they are grateful for, like their family, friends, and hobbies,” adds Watkins. A simple gratitude practice can “help them understand that money is beneficial, and we need it, but life is about much more than money.”