The best way for teenagers to learn lessons about personal finance can be through activities that allow them to have fun while developing new skills like budgeting, mental arithmetic, and thinking forward. Here are six ideas to help you raise a money-smart teen.
The Sale (for age 13)
Organize a garage sale or bake sale and put them in charge of their own table. It’s always exciting for a teen to find out they can make money selling stuff, whether it’s their old toys or cookies they made themselves. They will have to set the price of their products, find out if it’s realistic or not, bargain, calculate change, and learn it’s not always that easy to make money. In the case of a bake sale, encourage them to compare the estimated cost of different recipes and price each item accordingly. Make sure they participate in every step of the activity, from planning to cleaning up afterwards.
The Dinner (For ages 13-14)
Ask them to plan an easy dinner for the whole family on a budget. When you consider thinking about the menu, looking into recipes and flyers to find the best prices for the ingredients, going to the grocery store, paying the bill, and finally cooking and serving the meal, a lot goes into feeding a family! They will learn how to plan, compare prices, look for good deals, and make solid choices.
The Birthday Party (For ages 14-15)
Let them organize their own birthday party and set a budget. More complicated than just planning a meal, a birthday party involves several different elements to consider. The venue — at home or go out? How many people do they want to invite, and how will that number impact the costs? How much will it cost for decorations, cake, food, games, invitation cards, and will they make sacrifices on one thing so they can splurge on another? They can start by finding information and tips online.
The Getaway (For age 16)
Make your teenager responsible for organizing a day trip or a weekend of camping, again on a budget. They can choose the place and activity they like as long as they respect the budget. They will have to consider all expenses: gas, rental, admission charges, meals, and equipment. This will give them the opportunity to feel in charge and have a say in family vacations, while understanding that expectations are sometimes challenged by realities when there is a limit to what you can spend. They can also learn how to use online budget tools.
The Home improvement (For ages 16-17)
Do you need a new lawnmower, a dining set, or a snow blower? Put your teenager in charge of finding the best value for money and present the family with the two or three best options so everyone can have a say. They will have to compare prices and options, and they’ll realize that it’s possible to save a lot of money when you take the time to shop. Making their presentation and having to explain will force them to think about all the pros and cons of choosing a product.
The Traveller (For ages 17-18)
When they are about to finish high school, most young people dream about travelling, but are they aware of the costs? Planning the trip of their dreams can be an amazing way to learn how to budget for a mid-term goal, and be motivated to work hard, earn money, and save. Where will they go? For how long? How much will it cost for transportation, accommodation, food and activities? When they’re finished making the budget, they will also need to determine how they will find the money to achieve the trip of their dreams, and how long it will take.
Check out the RBC Parent Hub for more tips on teaching your teens and kids about money.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.