Three essential money attitudes parents must instil in teenagers

Youngsters must learn to think long term, value generosity and gratitude, and understand that the best investment is in themselves

It is important to help teenagers to understand that they must first invest in themselves. Getty

Parenting is hard, even when we know what to do. So, it is no wonder we find teaching our teenagers about money extremely challenging.

Most of us haven’t had the luxury of being financially educated ourselves. Add to that our shortage of time and patience, and you have the makings of an explosive mixture.

So, while I recommend outsourcing the nuts and bolts of financial education to trusted professionals, there are some key money attitudes that parents can instil in their teenagers.

These money attitudes are ways to teach teenagers about money, without explicitly talking about it. No arduous talks about budgeting. No lengthy discourses on spending wisely.

These money attitudes sow the seeds of financial success by encouraging and training behaviours that are aligned with the future. They subtly hardwire these behaviours so that they are deeply engrained and become second nature to our teenagers.

As with every other aspect of parenting, it is never easy and we will not always nail it. But, we need to keep at it consistently for any good to come of it.

Train them to think long-term

Make teenagers envision their future. This helps them to gain clarity on different areas of their lives and what they most value.

Convincing teenagers to focus on the long term helps them to make the right decisions in the short term. It puts their effort in perspective.

It also offers them a powerful “why”, which will sustain them during the hard, and often painful, sacrifices they need to make to achieve that long-term vision.

Thinking long-term isn’t easy, especially considering society’s penchant for instant gratification. Advertising messages and peer pressure will pull teenagers in the opposite direction — quick, short-term gains.

It is crucial that we explain to teenagers that many meaningful outcomes in their lives will take far longer to achieve than they might expect. They need to be ready to play the long game if they want to win.

This is arguably the most important mindset for teenagers to cultivate because much of their future financial success will boil down to how well they are able to master this attitude of long-term thinking.

Make them understand that the best investment is in themselves

Teenagers are keenly interested in investing. They see that as a gateway to riches. While that might be true, there are many caveats.

Teenagers have no knowledge about these caveats because what they see and hear is noise and fluff that obscure the reality of most investing journeys.

It is important to help them understand that they first need to invest in themselves — in their knowledge, reading, courses, physical and mental health and developing self-awareness.

This investment will pay rich dividends in many aspects of their lives, not only financially.

It helps build character and skills that will enable them to avail more opportunities. It lays the groundwork for a successful future so that teenagers are prepared when their lucky break comes.

It also serves to boost confidence in their abilities and self-esteem. It offers them agency over their own learning and trains them to be life-long learners.

Inculcate gratitude and generosity in teens

Gratitude is a powerful driver of success. Research shows that the benefits of practising gratitude include overall happiness, stronger relationships, higher self-esteem and a better outlook on school and life.

Research proves that gratitude is linked to financial well-being. Psychologist Nathaniel Lambert’s work found that stronger feelings of gratitude are associated with lower materialism. There is less desire to buy stuff when we are grateful and happy with our lives.

Gratitude also helps teenagers avoid impulsive financial choices. That directly correlates with improved financial well-being.

Artfully incorporating gratitude into a conversation with teenagers takes a bit of creativity, but the effects of any gratitude-building activity are fascinating, especially when they see for themselves how powerful it can be.

A team of researchers led by mathematics professor Kimmo Eriksson combed through data from the US, the UK and 23 European countries and found that in addition to healthier bodies, minds and relationships, generous people make more money than selfish ones.

So, while the mechanics of teaching teenagers how to make smarter money decisions is best left to experts, there are a few key money attitudes that parents can foster in them.

These money attitudes are valuable in their own right, but the real magic happens when these attitudes work together. The effect is compounded and has a remarkable impact on teenagers’ financial well-being.

Marilyn Pinto is the founder of KFI Global