Kids Korner: Give Them Ownership

Written By: Shari Evans AFC®, MQFP Your AFCPE Kids Corner Contributor Inspiring Kids to be Financially Literate

In this AFCPE Kids Corner Article, we will be exploring two personal finance “hot topics” asked by teenagers. The topics are: how do I make money, and how do I invest?

When answering a teenager’s personal finance question, I often provide responses framed within a three-pronged approach – Give them ownership, Give them help, and Give them an incentive/ reward. In this article, I’ll be answering our two questions within this framework.

The first question, How do I make money is a great question from a teenager thinking about how they can earn income. The fact that a teenager asked this question (as opposed to asking for money) communicates a desire to earn income and a desire to learn. With both learning and earning in mind, please continue reading to hear my thoughts.

The second question, How do I invest may be rooted in the current cryptocurrency era, or these teenagers are innocently interested in learning to invest. Regardless of the catalyst for the question, it’s exciting when a teenager shows interest in learning more about personal finances. So let’s get to some responses and how we can help our teenagers grow in their financial literacy.

Give Them Ownership

Making Money. Encourage the teenager to take inventory of the skills they currently possess and how those skills can be monetized. For example, if your teenager is skilled in playing an instrument such as the piano, they may be positioned to offer modestly priced piano lessons to other families within their neighborhood. To successfully offer piano lessons, the teenager would need to research the fees that local independent professional piano teachers charge, as well as the duration and frequency of lessons. The teen would then take this information to determine their offerings.

Likewise, if your teenager is a skilled swimmer, perhaps they may be interested in a summer job as a lifeguard. The teen would need to research the requirements for getting a job as a lifeguard in their area. Requirements such as age, safety certifications, passing a lifeguard- specific swim test, etc. may be influencing factors that need to be considered. If your adolescent aspires to work as a lifeguard one day, it’s never too early to begin preparing to meet those requirements.

Investing. I love the idea of recommending/encouraging teenagers to research answers to questions they are asking. Although it may be easier to answer questions directly, so much more is gained when independent research is a component of the dialogue. In the example of learning to invest, start small by asking the teen which company or stock they are interested in learning about. Give them some ideas, such as favorite technology, clothing line, fun place they like to visit, etc. Choose one idea and encourage the teen to research the stock they are interested in. They should research things such as the stock’s price history, information about the company’s dividends or payouts, for example. This recommendation is designed to encourage exploration.

Give Them Help

Making Money. Within the context of the examples of piano lessons and becoming a lifeguard, there may be some hurdles that our teenagers run into during their research phase. Remain available to help steer the researcher (teenager) in the right direction.

Investing. If throughout the initial phase of the fact-finding experience, the teen needs more direct guidance, it’s ok to jump in and accompany them along their digital research journey. In fact, the adult may also learn something along the way.

Give Them an Incentive/Reward

Making Money. Perhaps you can commit to paying the certification fee that your teenager will be required to pay as a prerequisite to applying for a lifeguard position. You could also commit to helping with transportation to the new lifeguard job.

Investing. A wonderful option to culminate this learning experience is to agree on a set amount of money you’re willing to give your teenager to invest. You may need to pitch in a bit more oversight related to the legal requirements for a teenager to invest in stocks.

Providing personal finance literacy to teenagers (through our clients), as mentioned in this article, is a great way to help get teenagers off their parents/guardians’ payroll and onto a paycheck that they’ve earned.