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Model Financial Behavior For Teens
NEW YORK (4/30/13)--Do money talks with your teenagers begin and end with "How much do you need ..? One expert says, don't tell teens what they need to know--show them (Money May).

Being a good financial role model may prove challenging. Only two of five U.S. adults admit they have a budget and keep close track of their spending, according to the 2013 Consumer Financial Literacy Survey by Harris Interactive Inc. And about four of 10 adults give themselves a grade of C, D, or F when it comes to money knowledge, a statistically significant change from 2010 when almost two of three adults (65%) gave themselves an A or B.

Despite the sobering statistics, there are plenty of activities that teach teens what they need to know. Beth Kobliner, personal finance commentator and journalist, and a member of the President's Advisory Council on Financial Capability, offers these suggestions:

  • Compare credit card offers. Review with your teens several online offers or those you get in the mail so they can evaluate different interest rates and fees.
  • Hammer home the minimum payment trap. Choose a desired item that costs, say, $1,000 and use an online credit card repayment calculator to show how long it would take--and how much extra they'd pay-- if they pay only the minimum due each month. Or, show them your credit card statement that shows the cost of making minimum payments.
  • Brace the teens for sticker shock. Rather than telling your teens to save for college, show why they should. Have them choose three schools they're considering, then help them navigate to the "net price calculator" required on all college and university websites. Then talk about the role that financial aid, scholarships and grants play to reduce the sticker price.
Finally, remember that the real world is a far better teacher than most high school math assignments. Make your teens responsible for personal items such as new clothing, shampoo and snacks. This teaches the valuable lesson of searching for bargains to stretch the value of their own dollars.

For more information, read "Teach Teens Financial Responsibility" in the Home & Family Finance Resource Center.
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