Teens and Finances: What They Need to Know

"I work with teens in therapy groups. Often, we discuss the importance of discovering your interests and exploring what type of career you might envision for yourself. While some of the teens in the groups understand the value of working toward career training, many teens have trouble envisioning what they want to do with their lives. In addition, they don't always have a sense of what their parents currently pay for and what they're going to have to pay for when they become adults."

"They then talk about all the money they could make at a fast-food restaurant or other retail establishment. They add up the hourly wages, often without realizing that taxes are taken out, and think they'll be able to support themselves. Unfortunately, most of the time, these kids have an unrealistic view of all the financial responsibilities that go into creating financial stability."

"To a teenager, minimum wage may sound like a lot of money when they have everything in their lives paid for by their parents. However, when the reality of actual financial costs for home, food, utilities, etc. are discussed, suddenly their eyes widen and they begin to realize that perhaps they've been viewing their financial futures through rose-colored glasses. The truth is, often teens are not at fault for their ignorance about finances and what it's going to take to support themselves."

Teens in therapy groups frequently struggle to envision careers and lack awareness of the costs adults pay. Many consider leaving school for entry-level work, overestimating take-home pay and overlooking taxes and basic living expenses. Minimum-wage earnings can seem substantial when parents cover housing, food, and utilities. Presenting realistic financial costs often shifts teen perceptions and reveals the scope of responsibilities required for stability. Developing a marketable skill and pursuing career training increases long-term earning potential. Open conversations about money and parental expenses broaden teen perspectives and help with planning for adult financial responsibilities.

Read at Psychology Today