My oldest son graduating from high school in two years is an event that is hard for me to believe. Becoming the parent of a young adult is not only bittersweet emotionally, it’s also a bit frantic as you scramble to make sure they have all the skills that they’ll need to live independently.
Here are five of the skills and concepts that will help him manage his money wisely that I want to be sure my son masters before he goes off to live in the dorms.
1. How to cook and make wise food choices. A diet of dollar menu fast food and instant noodles is inexpensive, but it can lead to obesity and a slew of other health problems in the long run. It’s important that young adults learn how to make tasty, nutritious foods from scratch and to learn to make good choices in their college cafeterias.
The best way to teach teenagers these skills is to involve them in the family’s shopping and meal preparation and to eat meals together as much as possible. It’s probably natural that some kids will go a bit crazy on junk food when they first leave their home, but having these skills and knowledge of what healthy eating looks like will serve them well in the future.
2. Driving is a huge responsibility. Teenagers need to know it’s a privilege and not a right. Again, I think that setting a good example as a parent is crucial for helping your child learn good driving habits, so make sure that you are driving defensively and following all of the rules of the road. Driver’s education classes help, but it’s easy for young people to ignore what they’ve been told, if they see you doing differently.
Teenagers also need to understand the financial responsibility that comes with driving and owning a vehicle. They should know that insurance is not optional and must be paid on time every month if they wish to continue driving. They should also know just how much a ticket could cost if they are caught violating the rules of the road or if they are towed/booted for parking illegally. Finally, they should also understand the importance of routine maintenance and that they need to keep savings on hand to pay for any necessary repairs.
It’s a good idea to help your teenager learn that you don’t always need to rely on a car for transportation. Teach them how to use public transportation and how to ride a bike on the road safely. Gas and insurance prices will continue to go up, so it can be a gift to help your child learn to look for alternative transportation whenever possible.
3. Always read the fine print. Your teenager might roll their eyes at you and sigh deeply, but make it a point to read over all their contracts and agreements with them while they are still in your house. Their first checking account is a great place to start. Point out all the fees and policies that can affect their bottom line, such as monthly maintenance charges, overdraft charges and fees to use a foreign ATM. They need to learn that not knowing what they are agreeing to can cost them real money.
Be sure they know that they should read everything they are asked to sign and to ask questions if there is something they don’t understand.
4. The long-term consequences of student loans. You don’t want to discourage your child from perusing their education and dreams, but you also don’t want them to be saddled with a mortgage-sized debt the minute they graduate from college. Having a frank discussion with your child about how much you can help them with paying for their education is important in preparing them with realistic expectations of how much they’ll be able to afford to pay back once they start their careers.
Education is always worthwhile, but it might not be in your child’s best interest to take out tens or hundreds of thousands of dollars in loans to attend a pricey university when a lower cost option would be a fine alternative. Be supportive of your child’s desires, but make sure that they have the information available to make an informed decision about where to go to school and how to pay for it.
5. Asking for help is okay. You don’t want your teenager to think that the bank of mom and dad will always bail them out from their irresponsibility, but make sure they know that you are there to offer them the benefit of your experience.
Teenagers should be encouraged to ask questions and to understand that it’s perfectly fine and normal not to know everything. Teach them that coming to you when problems are still small is beneficial to them because you can help them find a solution rather than waiting until the situation becomes a big mess.
You don’t have to solve their problems for them (and probably shouldn’t) but you can help them learn how to look at their problems in a productive way and how to break it down into manageable chunks. Most importantly, you can teach them that there is no shame in asking questions and that practically every problem can be solved with patience and clear thinking.
What are you teaching your children to prepare them for life in the real world? What do you wish your parents had taught you?