The Science of Parenting

Teaching Kids about Money in the Teen Years | S.11 Ep.5

May 18, 2023 Iowa State University Extension and Outreach Season 11 Episode 5
The Science of Parenting
Teaching Kids about Money in the Teen Years | S.11 Ep.5
Show Notes Transcript

The teen years can be a prime time for our kids to learn about and practice managing their own money and to experience financial tasks with the help of their parents. Listen in for ideas on how to support your teen in building healthy money habits and other areas you can help them build skills for the future!

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Mackenzie Johnson:

Hey, Mackenzie Johnson here, coming to you with a special opportunity that the Science of Parenting team has going on right now. We are collecting feedback from you, our listeners and viewers, all about last season, where we were talking about kids and food. We have a short 10 minute survey that we are going to ask about what you thought about last season, what you learned the last season. You have a chance to kind of give us your thoughts on the overall podcast, as well as even an opportunity to submit a topic for us to consider in the future. So your feedback is going to help us make decisions about our podcasts and future content. If you are over the age of 18, if you are a parent or caregiver of a child, and if you've listened to any of the episodes from last season, that's right, even just one of those episodes where we are talking about kids and food, you can find the survey link in today's episode description. Or you can also find it on our social media on Facebook or Twitter at the science of parenting. Thanks for listening, we hope you'll participate and enjoy today's episode. Welcome to the Science of Parenting podcast where we connect you with research based information that fits your family. Well, we'll talk about the realities of being a parent and how research can help guide our parenting decisions. I'm Mackenzie Johnson, parent of two littles with their own quirks. And I'm parenting educator.

Suzanne Bartholomae:

And I'm Suzanne Bartholomae. I'm an associate professor who strives to help people increase their financial security. And I'm the parent of a high schooler.

Mackenzie Johnson:

Yes. And we're here talking, we get to talk about high schoolers today, right? Yeah, I'll say, we're gonna be digging in. We've been talking, we're doing a little snippet of episodes here in the middle related to how to talk with our kids about money, but at what age of kids. What are they doing? What are they learning? And so last week, we talked about childhood, both like preschoolers and school-agers and some of the things they're learning. And this week, talking about teens, which this is exciting and scary and exciting, but also scary. But teens aren't so scary, I give them a bad rap. They're not so scary. A lot of great things, actually, we're going to tap into this episode when we talk about our teens. So as a reminder, last week, we introduced this idea of the financial capability. And remember, there were three building blocks. So we talked about executive function as the first one, financial habits and norms, and financial knowledge and decision making skills. So these are the three building blocks of financial capability. So we talked about them in childhood, we're going to talk about them with teens. And then next week, we're gonna talk about them with another age group. So three building blocks, executive function, financial habits and norms, and financial knowledge and decision making skills. Right, Suzanne?

Suzanne Bartholomae:

That's right. Yeah. And so something we didn't talk about last week, which we both were surprised. We're saying, we didn't talk about different rates of development, an individual should, you know, individuals, right. So these building blocks are accumulating in an overlapping fashion is one thing I would say about these three building blocks. But getting back to that importance of understanding that each child is different in terms of their executive function, you know. Their impulse control, their ability for attention and focus, and also their skills, things like numeracy skills, again, that math being so important, and math really emerging in this broad period of development. And then the other point, I think, that we wanted to make was that we know that development is lifelong. I'm still developing, especially my executive function skills. Being able to, you know, delay gratification, who doesn't struggle with that, right?

Mackenzie Johnson:

Mm hmm. Yes, when you pointed that out, when we started walking through this, like, you know, we should really tell people that kids develop at different rates, I'm like, oh, that's probably the expertise, like I should have probably thought of that. Look, see? But so we're telling you now, teens each develop at their own rate, and all of your children, all of the children of all the ages. Everybody develops at their own rate, based on lots of things. But when you were talking about this idea of how these building blocks accumulate and overlap, I was like, oh, yeah, it's not like one or the other, right? It's not like we did this. And then we did that. And then we did that. Right. It's like, just together and it kind of made me, I'm tapping into Lori's skills, right. Lori often gave us a word picture to explain a concept. And I'm kind of picturing like a Jenga tower. Right? And so there's like this kind of foundation. And almost if we would even give, really going to dig into the details of this word picture, like a different color for each of these building blocks, right? So like maybe executive functioning is yellow. And since that develops in childhood, or a lot of it, right, that's where they kind of get started in the younger years, there might be a lot of yellow at the bottom of this Jenga tower. And then we trickle in these other things, right, but it's not, they overlap. So it's not like it's all yellow, right, there might be green and red kind of trickled in. And then as it keeps building, then we start to see more of, let's say, financial habits is green. So you start to see more green, but there's still red and yellow blocks in there, right? Our kids who are in school age are still learning some executive function and still learning some financial knowledge. But they're building a lot of like, they're doing a lot of work around habits and norms. And then in the teen years, I'm gonna go red, I guess, financial knowledge is going to be red. That's the area or they're doing all of them because they overlap and accumulate, but a lot is happening in this financial knowledge area for them. That building block is a huge one that's happening for teens. Right?

Suzanne Bartholomae:

Right. Yeah. So I absolutely love the word picture. I think it's a wonderful way to think about things. And so yeah, knowing that last week when we talked about the younger children, that that executive function is really where the emphasis is with the preschoolers so that impulse control and abilities to check your emotions, right. We're not going to be seeing that as much in the teen years, hopefully. I mean, it's not that it's not still there. You know, and then the financial habits and norms being important in the middle school, or middle age, middle childhood, middle childhood period. Yeah, exactly. So when we think about the three developmental stages, they're really based on again, when an individual will commonly acquire a particular skill and attitude and habits. So again, like those numeracy skills, cognitive abilities, and attitudes, so that's one, I think, big factor that our development is based on.

Mackenzie Johnson:

Just their rate of development across different domains.

Suzanne Bartholomae:

Yeah, your maturity, and then that big piece for the Jenga blocks, and we talked about and, you know, thought about this is that when a child gets access to financial decision making, an experience is really going to be key. So is the red block of financial knowledge and decision making coming earlier in the tower? Or is it later in the tower. Is their, you know, earning money allowing, you know, just different capacities to be built. And, and I think we talked about, you know, the environment, our family, you know, think about the child of an entrepreneur and their Jenga block, who may be a child who goes to, you know, goes to work with their parents because they're business owners. And so they're involved in maybe some of the day to day functioning of the business, and they're picking up communication skills, organizational skills, you know, all knowledge as well. And so their blocks in their color, just love the Jenga, their color tower is gonna look a little bit different. So I think that's a really good way to visualize development.

Mackenzie Johnson:

Yes, well, and then, you know, I also hear, you know, talking about how it's different for each person based on, one, their natural development rate, but two, which we don't necessarily influence or have much influence, I should say, but then we can influence how much access or experience they get with financial decision making, right, and at which ages, but that's going to change their tower. So everybody's tower looks different. So like, my tower versus your tower, versus you as a listener versus my child versus your child, right. Everybody's tower looks different in the color, but maybe even in the size, right, like the number of blocks, right? If they have experiences where they get a lot of chances to try out financial skills, they might be getting more blocks than someone who, let's say, like, I didn't have a job in high school. I didn't start really managing money until my senior year. And that was because my mom was like, hey, if you're gonna go to college, you've got to try something out. And so I maybe didn't have as many building blocks as some of my peers. Yeah, absolutely. And even now, don't.

Suzanne Bartholomae:

That's a great example. And we've been talking all season about access, right? So access to a financial product, access to parent modeling with different financial decisions and habits. Right. So yes, that is going to influence the blocks and what's in place.

Mackenzie Johnson:

Absolutely. Okay. So a few things that we just covered, like all together here. We use three building blocks of financial capability, still talking about those, but that there's variation, right? There's variation and each of us in our own development, and when we get these experiences, that's a big influence on how and the rate at which these develop. And so I think that's really important for us, you know, to kind of understand that they accumulate. It's not like the bottom is all yellow, the middle is all green, and the top is all red, right? They're overlapping, right?

Suzanne Bartholomae:

And it's their parents. You know, the first thing we're told when we have an infant, I think, and now we're already in the teen years, and we're talking about it, right. And so remember, we barely remember what it was like to hold our infantht when we get to the teen years, but we're told, you know, don't compare your child to your infant or your toddler, your toddler is not crawling. Well, let's not compare that to someone that's walking, because they're on their own trajectory. Right? Yeah. And that just is comforting to know that like, it's okay, you know that? Yes. And just a reminder, gentle reminder that everyone looks

Mackenzie Johnson:

Mm hmm. And in this area, too, right? We different. talked so often about like, the cognitive, right, like the thinking domain versus the physical domain of like, how the body develops versus the social emotional brain, okay, but also this domain of like money and financial, like knowledge, skills, capability, this is another domain. And so it's okay, if our kids might be further, their block tower might have more blocks, or their block tower might have less blocks, for a huge variety of reasons, like you said. Environment, parenting, organizations, experiences, all these things. So it could be different. That's okay. It should be. It will be.

Suzanne Bartholomae:

Right. All the domains that you mentioned are feeding into the financial domain as well. The social emotional development feeds into executive function. Cognitive development feeds into financial knowledge and decision making. And so on. So, yes, and that accumulative and overlapping fashion of all these domains.

Mackenzie Johnson:

Oh, yes. Yeah. Again, they're all together. We could use this Jenga analogy for all of the development, right?

Suzanne Bartholomae:

Oh, my gosh, yeah. It's the only one I use.

Mackenzie Johnson:

Yeah, okay, everything's Jenga, just everything from here on in. Okay, awesome. Well, we want to dig in to talking specifically about teens across these three building blocks of financial capability. So I'm actually going to steal some tidbits that Suzanne told me earlier about when these start, so if I can steal that from you, Suzanne? Oh, yeah, I thought it was really interesting. So let's talk first about this idea of executive function. Right, we talked a lot about it related to preschoolers. But as you said, it's still developing all the way across, it doesn't stop. And so executive function, we start developing at age three. But here's some of the tidbits specific to the teen years. This is a table directly from a Consumer Finance Protection Bureau report, my new bestie, I love them. So the few things they tell us about executive function and teens, what we know is that teens are starting to demonstrate some more critical thinking skills. And that affects how they understand and use money. I love this one, that our teens more than the age groups before them, are really starting to get some future orientation. They're thinking about the future. And like, right, their brain literally processes it in a different way than like a 10 year old does. That it gets a little more concrete and like, okay, if I want these things, and I'm thinking about wanting these things in the future, I will be doing things now that affect it. So they are starting to get some real great skills and knowledge related to future orientation. And then that future orientation, along with the critical thinking, they are starting to demonstrate their ability to plan ahead and delay gratification. And even though I'm like, yes, look at teens go, all this great executive function. I'm like, and I think a key phrase is start. They're starting to, right? They don't have it mastered. They don't have the lived experience of an adult who's learned, like you said, school of hard knocks, right, maybe learned the hard way. But they are starting to demonstrate this. They cognitively are getting there and it's a great opportunity for us as parents to build on that. So I want to talk to you, Suzanne, you have a lot of insight how this specifically relates teens and finances and money. So talk about executive function and teens. Tell me what are your insights?

Suzanne Bartholomae:

Yeah, so just as a reminder, strong executive function makes it easier to plan, to focus attention, remember details, multi-task. So kids, teens are starting to demonstrate, you know, their ability to do some problem solving, maybe to break big tasks down into smaller chunks, right, so that they can manage and plan. They're starting to maybe have some successes with financial planning and goal setting. And a lot of that is executive function, right? So let's delay gratification. And critically think about okay, how am I gonna accomplish that goal? Right. So yeah, and for the first time, they might be earning income, right. And that's one thing about teens is that for the first, the last several, the last generation or so, have really come into a lot of money in terms of being actors in the economy, right? So they have more money at their disposal, and they're engaging in the economic system more than previous generations.

Mackenzie Johnson:

So that executive function, they're gonna be using it, right? Yeah. When they like, we know that our teens can have some income or at least have access in whatever form that comes to some things. And so they're gonna be using that executive functioning.

Suzanne Bartholomae:

And we continue to.

Mackenzie Johnson:

Oh, yes, yeah, we can say that about our Jenga, like word picture of like, there's no ceiling in this room where we're building our Jenga, right? Like it keeps, it keeps, like I'm building it, you're building it, we're all building it.

Suzanne Bartholomae:

Yeah, those blocks, we need to always need these blocks to shore us up in our financial behavior.

Mackenzie Johnson:

this starts to develop around age six, which is what we said last week, right, in middle childhood or school agers. They're starting to get a sense and develop their money persona, if you will. A few tidbits from the Consumer Financial Protection Bureau related to teens and their financial habits and norms. Developmentally, they're starting to have a more positive attitude toward planning and saving and frugality and self control. We love that. They're starting to show positive money management habits and decision making skills. They can make spending and saving, I love this one, they can make spending and saving decisions that are aligned with their goals and values. I think of my sweet school-ager who like every time comes into $1 wants to go buy candy, right or wants to go make this impulsive, in my opinion, purchase. But our teens are starting to like, you know what, actually, I want to do this thing. And maybe the value is belonging, maybe the value is education, maybe the value, right? It can look different for each team, but they're starting to make money decisions. Their habits can align with those. And then finally, they're starting to get confident. They're having a little more confidence in themselves about their age appropriate financial tasks, like, I know I'm gonna need to put gas in my car, right? And so they can start to get confident of like, okay, yep, I know I'm gonna have gas money. And so they're really building some confidence in this area, which affects their habits and norms, too. So that's what they tell us about these milestones from the CFPB. You had some really interesting insight here, though too, Suzanne.

Suzanne Bartholomae:

Yeah. So they're really learning about opportunity costs and trade offs, and some of those financial decisions that they're making, and do I save my money for a personal item, whether, you know, something like a cell phone or skin products, like I mentioned my daughter is really into. But they are, you know, we talked a couple seasons, I mean, episodes about the model, Financial Action, and the influence of the environment and social environment and that shapes our habits and our norms as well. And so I think we were talking about how there's some research with teens around the Great Recession, when that happened, and how they really do pay attention. And they worry about the economy, at least based on the study that, like adults, you know, the economy is impacting their saving and spending, because they indicated that, yeah, I'm spending my money differently. I'm spending less because of the economy. They're talking to their friends about it. So we may not think that teens are paying attention, but they really are. And some are anxious about it, too, you know, or they were at the time.

Mackenzie Johnson:

Yeah, yes. When you shared, you know, the first time you shared this when we were walking through this, this insight, I was like, Oh my gosh, I do not give teens enough credit. Right? I'm giving them a bad rap in the earlier part of the episode, but that their habits and norms were shaped, right? They were paying attention to the economy, and that the way they were actually doing things, and again, aligns with their values. Right, right. And they're saving and spending in ways that align with their values of, okay, I'm concerned that I'm not going to have enough money for blank or that my saving isn't gonna go how I planned because of things that are happening in our like, in the world. And yeah, they're

Suzanne Bartholomae:

They are paying attention. And then paying attention. there's another study, and this is at the individual level, that asked teens like, who is responsible for, like whose job is it to be responsible for money? And more than half say that it's their job, and only about a third said that I share, that it's a shared job between me and my parents. Interesting. Yeah. Yeah. So again, as we get to the teen years, being responsible and instilling a sense of responsibility, parents are doing a pretty good job if over half of them are saying it's solely. I mean, we want them to know that we're there for support. But you know, at the same time, our goal is to get them to independence, which we'll talk about next week. Yeah, that's the next episode rather.

Mackenzie Johnson:

Yes, it's coming. Oh, awesome. Okay, so let's talk about this third category. So I told you in the last episode about the green checkmarks, right, of which age and which building block are they doing a lot of work around? And so for teens, this is that area. Teens are doing a lot of work around their financial knowledge and decision making skills. So the literature tells us, this really starts to expand and develop around age 13. So right at the beginning of these teen years, they're really digging in to this knowledge. And so here's what we know from the CFPB, that teens are grasping more advanced financial processes and concepts like taxes, like investing in part, you mentioned because of their math skills. They know how to do percentages. And like, oh, I'm so embarrassed, exponents, right, like something squared. I was like, there's a word, there's a math word. Again, new math. Yeah. Right. And so they understand investing and they can understand some of these things in a different way. So they're advancing some of the more advanced or they're grasping some of the more advanced skills and processes. They're starting to manage their own money to reach their goals, right? And so part of that is their habits but there's also a level of knowledge, right? Like, I know how to make those decisions. And then the third little tidbit they had here is that, and I think this one is really like, yeah, interesting for teens, they're starting to identify trusted sources of financial information. And to make decisions and accurately process it like, well, actually, maybe I don't trust this particular source of information, or I really should trust it. Or I'm not sure so I need to figure this out. Like, I need to find another source. They're starting to really do that process for financial decisions.

Suzanne Bartholomae:

Yeah, so they're learning how to be good consumers. Right, which, you know, we've talked about that financial knowledge piece is being able to find the unbiased and reliable information, process it and act on it. And again, the acting on it falls back and overlaps with the executive function. Do you follow through on something, right? So yeah, so they're starting to develop firsthand knowledge, right, and skills, because their money, they're earning money, then it's just much more relevant for them. So they're making purchases for the first time, maybe. Maybe earlier, they've had some experience. Maybe they're opening a bank account, maybe they're borrowing. You know, we're gonna get to the later ages. I mean, this goes all the way up to 21. But some are going to be borrowing. But there was a survey of teens about what they want to learn about money. And so that would really fall on this knowledge category and what skills they want.

Mackenzie Johnson:

I thought this list was so, as a parent, I don't have teens yet, but as a parent, like, what should I be teaching them? And so this idea of like, what did they actually want to know? I love this. So hey, parents, listen up. She's gonna give us a good list here.

Suzanne Bartholomae:

I am. Well, it's interesting list. And then also just know that they are eager, eager to learn. I don't think I mentioned that to you that, you know, when we asked teens, do you want to learn about money, more than half are very eager to learn about money. So they want to know about how financing works for large purchases, like cars or homes. And again, it gets into that relevancy of the information for anybody at any age, like, yeah, if it's relevant to me, I want to know about it. They're interested in learning how money grows, so about how to invest like investing money. They're interested in identity theft, and how to protect themselves, which I thought was surprising. And then they just want to know the basics of like budgeting, checking accounts, and credit cards. But I think it is really interesting, and it gets back to this kind of sense of responsibility piece, is like, why do they want to know the topics? That was a follow up question to identify the topics. And the top reason the largest majority of teens said was that they want to know this information so that they can pay their bills, so they can stay out of debt, so they don't have to rely on others for money. Again, that, you know, I'm solely responsible for managing my money, not my parents. Being able to take care of their family, which, you know, that sense of community or, you know, not just being the self-centered teen that we think about, right?

Mackenzie Johnson:

We don't give them enough credit.

Suzanne Bartholomae:

Right. No. And last on the list, like the smaller proportion, was that they want to buy things they like, which again, I think we probably pigeonhole teens into being like, they're selfish and they just want to, you know, buy stuff for themselves. Well, you know, this particular survey did not bear out that assumption or bias.

Mackenzie Johnson:

Yes. And I do think that's important for us to recognize. And again, this is a this is research, we always have like a dose of reality in here, right? Where our kid falls on these, which topic, not every single kid, we're not saying every single kid is interested in every single one of these, but that these are topics as a group that teens might be thinking about that we might have opportunities or are gonna start to think about opportunities to start sharing this with our teens. And yes, their reason may be on the list or might not be depending on their values and experiences and things. So I think that's a great opportunity. One thing we haven't talked about that, I'm like, okay, I feel almost like we need a moment to just dig in here, is like, what is it, what are some things about the teen years that are unique related to money. You know, some we've kind of mentioned in passing, but I'm like, okay, this is the age where they're allowed to get jobs. Right, this is an age where they have some independence with like, you know, they might have a vehicle or some of their own form of transportation. Their belonging is a huge thing in the teen years, right? That's like a huge developmental, they want to belong with their peers a lot of the time and so that can influence their decision making financially. And you also said, their access, right? Their access to the world outside of just what their parents show them, right, whether that's social media, or the internet, or just school in general. Anything you'd add that I'm like, we've kind of mentioned some, but anything you'd add that's specific to the teen years related to money?

Suzanne Bartholomae:

I think that the biggest piece is the fact that they're earning. They have access to money, and whether it's through allowances, gifts, or job, however they have access to it, so they're managing and making their own purchase decisions, I think, excuse me, independently maybe for the first time. Whereas we may be more, because we're not with them all the time. Right. They're out there interfacing with society without us unlike maybe our elementary school children, right, or middle school kids. They start to, you know, become more independent, but we're not really monitoring them. So they do have to independently be able to make some good choices. Yes, yes. And I know you like to hit on the piece about that we're providing safe opportunities to make decisions.

Mackenzie Johnson:

Low consequence.

Suzanne Bartholomae:

Yeah, yes. Yeah. So that's, that's the big

Mackenzie Johnson:

And right, to them it might feel very high Yeah, yeah, I think it's a good, I mean, not a good. It's a great piece, too. consequence. I had planned to do this thing, buy this purse and like these shoes, or I really wanted to buy this chair, this piece of furniture for my room, or this collection of books from this author I really like right? This album that I like from this artist, right? Yeah, they have specific financial interests, right? They're like, oh, I want to spend my money. And yeah, that sometimes they might not get to, right? They might make a decision. Again, it feels like a high consequence to them. I wanted to do that and I ended up going to the movies with my friends, or we ended up going somewhere and spending money and now I don't have enough to do that. That's low consequence in terms of the scheme of like, wow, sometimes the adult consequences of things, but it can feel high consequence to them. observation, really, in terms of like, you set a goal, and then all of a sudden, you get derailed because of your executive function skills are not strong enough, right? You don't delay gratification. Right. And that's like, again, that starts to develop at age three, still developing, not done developing, the executive functioning for sure.

Suzanne Bartholomae:

Yeah. And the variety of interests, I think is a really good point, too. I think some kids are saving for a concert ticket, you know, others want to do a sport. And so you can be priced in and out of those interests depending on what it is.

Mackenzie Johnson:

And that's a really great point. There are some interests that are wildly expensive, right? I even think of, I have a friend who her parents would joke about. They had horses and she was very, like, she did a lot of shows, she did a lot with their horses and she goes. And her parents used to joke like, this is an incredibly expensive hobby. Right, like horses, we have to feed them. This is different than you know, like, books.

Suzanne Bartholomae:

Or tennis. Picking up a tennis racket and going to, yeah.

Mackenzie Johnson:

And so every interest that our teens might have for sure is going to influence, yeah, priced in or out of based on whether that's family income or their specific independent income for those hobbies and interests. So absolutely. Well, this brings us to a little more reality here as we think about, okay, you're telling me all this stuff about teens and how they understand and kind of don't understand, but do understand more than we give them credit for related to money. And so how do we nail this down as a parent? How do we really dig in and strategize how to talk with and teach our kids about money? And so we have two strategies this week for teens. One, the first is related to experiential learning, what you were talking about last week. Basically the idea of creating opportunities and letting our kids have opportunities really related to money and trying things out again. Like I said, love to say low consequence. But yes, the whole idea of jobs or internships or setting their own financial goals and interests, the more opportunities we can help give them, right, the more blocks, if you will, of financial experiences, they benefit from that. And one that really stands out to me, I want to lean back into all the parenting skills we know, I think money in particular with our teens can be a really important place to utilize natural consequences. And I actually, so often we think about with consequences like setting consequences, and I want to say you have to let the consequences instead of set them. With a natural consequence, sometimes it is letting your child experience the disappointment of, I had planned to save for this and I didn't and now I can't do it. Now, again, within your reason and best judgment, but I think sometimes as parents, we are so quick to protect our kids from disappointment and myself included, right? Oh, you're so sad and I can fix this for you. Right? Like I talked about teaching my daughter about tax, she wanted to get that thing and she didn't have enough money and yes, I could have purchased it. I did have the funds right there that I could. And I needed, I felt I needed to let her experience that natural consequence, that disappointment of you chose something that cost too much and you can't afford it. And so I do think that's an important experiential learning opportunity for our teens. What would you add about experiential learning for teens, Suzanne?

Suzanne Bartholomae:

Oh, well, the phrase financial apprentice, the idea that, you know, you could consider your teen your little financial apprentice, if you really want to try and give them some experiences and experiential learning, so that they become more financially capable. So teaching them how to pay a bill, showing them how you pay the bill, have them pay the bill for you online. You know, that's one example of experiential learning. Simulate, yeah. And in schools and community organizations, a lot of teens will get experiences with simulations. And that's, I know, not giving them the natural consequences. It's actually again, a safe opportunity.

Mackenzie Johnson:

They're creating a low consequence experience. The experiences they didn't do well, or maybe get what they wanted in a simulation, that's very low consequence. That's great.

Suzanne Bartholomae:

Yeah, yeah. And we actually use it for adults, too. So we have a retirement planning simulation where you know, okay, you get your scenario of who you are and who your persona is. So like, with kids, we do it like, Okay, this is your profession, this was the amount of money you make, and now you're gonna go and in this safe environment, go shop the realities of what life costs, so housing, selecting your where you want to live, what you want to drive, what your hobbies and interests are, right? What you can afford to do. We do the same thing with retirement. So here you are, you're a person in retirement, and you didn't save for retirement. And so you have this many beans, and you have all these expenses, and they change, you know, over time. Expenses become more, right? Um, yeah, tend to increase the older we get. We want to maybe do certain interests and hobbies, even as older adults, right? Yes, traveling or whatever the hobby is and you can only do a certain amount if you don't prepare a plan and, you know, have the resources for it.

Mackenzie Johnson:

I love the idea. Yeah, the idea of simulations as experiential learning, and yes, whether that is organizations or schools often do that. But we can even kind of do that in our family, you know, like a low tech version, if you will. Okay, try to figure this out, you know, passing the, I don't wanna say passing the buck, but like passing the opportunity to our teen to maybe, okay, we've got this tough financial decision to make. What's going to influence this decision for us? And I love that term of financial apprentice. I'm almost like that's a mindset, right? I don't even have to think specific action as much as if I think about my teen is my financial apprentice. It helps me seek opportunities, right? If I think about like, my job is to teach this apprentice, if I'm mentoring someone at work, or maybe in school, if I'm a mentor, those types of things. If I think about my teen that way, I can think of a lot of opportunities I would maybe seek out. So I love that term.

Suzanne Bartholomae:

Yeah, I think it is a really good way to frame it, too. Mm hmm. And just a gentle reminder for parents, right? Like, yes, keep engaged with them and try and give them those opportunities.

Mackenzie Johnson:

The literature tells us a lot of teens want, yeah, want to learn those things.

Suzanne Bartholomae:

They do. They're eager.

Mackenzie Johnson:

Yes. Okay. So then the other strategy for teens and again, I think everything in this episode, everything's interesting to me, because I don't think I knew a lot of it before. But this strategy about teaching financial research skills for teens, that we can help them, right? How are you going to make this decision? How do you comparison shop? How do you decide between getting a service from this place or getting a service from that place? And so I feel like some of those skills, I don't always think about that. That that's an active thing we can teach is that discernment and that research of figuring it out.

Suzanne Bartholomae:

Oh, yeah, yeah, so again getting back to we're really trying to raise consumers, right, good consumers. To be a good consumer, you need to have information literacy, right, knowing what reliable non-commercial, non-biased information is. And so being able to have research skills is a big part of being a good consumer, right. And then again, making intentional decisions like you said, so we know that our teens can research, you know. They are on social media, they look things up, you know, again getting back to the personal interests, like they might search something on the internet to try and learn more about something, or try and find a friend, you know, in social media. That can also be applied to a financial topic, like what's the best credit card you can find at this point with the best interest rate? And just takes a couple of questions, you know, while you're searching out information and be able to compare and contrast, that comparison shopping that you talked about? Yeah. So. So there's evidence that the kids, they have some money, they like to spend their money, and so they should be researching some of those decisions that they're making. Absolutely. And make sure they're getting the best buy, right? Like that rule? Yes. The rule of three, is that what you were gonna bring up, the rule of three?

Mackenzie Johnson:

I was not, Suzanne, I was not headed there.

Suzanne Bartholomae:

Okay. Okay.

Mackenzie Johnson:

But you can. I want to hear you remind everybody about it.

Suzanne Bartholomae:

The rule of three, if they're really interested in different personal items, let's say they want to get a cell phone, or they want to, you know, buy whatever item it is they want to buy. So you want to get the best price as a consumer, right? You want quality, you gotta be able to compare quality and price, that trade off. And so yep, the rule of three, you want to get three prices from three different companies? Yeah.

Mackenzie Johnson:

Yes. So I was gonna go, it actually ties in nicely. So this works. But you've mentioned the idea you kind of mentioned it a little earlier in the episode, but we didn't say it explicitly, this idea of making the experience concrete, right. So like, the just in time, the relevant teaching moment, that as we think about helping our kids, our teens with these research skills, or with experiential learning, that it's like something that's relevant to them right now. Right? So not necessarily, let's go look up mortgage rates. And where are you gonna get a house loan, right? But okay, you're interested in getting a vehicle, right? Or you're interested, I'm like, in Iowa we have a lot of mopeds. I have a lot of mopeds in our town, right? So I'm like, okay, you're interested in a moped. Let's research that, right. And using those skills in the kind of, relevant interest, relevant moment, is something you've kind of highlighted as important too, right?

Suzanne Bartholomae:

Yeah, for teens or adults, we find with financial education that if we're going to keep them interested, it has to be relevant to them. It has to be timely, a timely decision that they're making. So in the case of teens, they're interested in independence because they're able to get their driver's license, right, school permit. And so they want to have some kind of transportation. And so I think your example is a perfect example of you can have them research all the expenses of having a car, right? What's it going to cost in gas? What about insurance?

Mackenzie Johnson:

and oil changes?

Suzanne Bartholomae:

Oil changes, maintenance, right? Yes. And just the car itself? So yeah, and I think that it's a great opportunity for kids to put their good research skills to use and planning. But yeah, we can't just sit down and they're like, yeah, let's learn about mortgages.

Mackenzie Johnson:

Yes. I've seen this interesting movement of like, I feel like I've noticed it on social media, of teens doing actual PowerPoint presentations to their parents when they want something, right. So they'll have but like, it's a movement that parents have said, okay, you want to do this, show me you've done your homework. And I think that's really fascinating of, okay, you're interested in getting a cell phone? Maybe I'm on the fence about that decision, or upgrading to a certain cell phone or right, whatever the choice is, that they have to do a PowerPoint or have to do some kind of presentation of what they know, that they've researched, that they've done their due diligence. That's experiential learning and teaching research skills.

Suzanne Bartholomae:

It is. I'd heard, I have heard the same thing about PowerPoints and yeah, you gotta sell me on this idea of what you want and it better be research based. Yeah, but you know, and because we mentioned that this age, they might be entering the labor market for the first time, if they haven't already. That's another great research opportunity to say, if I get a part time job at x, you know, what are the hours? What's the pay? Are there any benefits? You know, are they closed? Like, I look at certain businesses, I'm like, well, you know, they don't work during these hours, or they're closed on these days. So you know, this works into a schedule, and it's kind of a benefit. So I think that would be another good opportunity for teaching research skills.

Mackenzie Johnson:

Oh, yes. Absolutely. Yes. How much money? Or even like, I'm in an extracurricular activity. Is this place friendly to that?

Suzanne Bartholomae:

Yeah, flexibility of scheduling. Yeah.

Mackenzie Johnson:

A lot of really great opportunities to help build these skills, because they're eventually going to become adults. And so we want to help them have these experiences and skills, low consequence. If they're going to learn from hard knocks, I hope as a parent that I can, if we're doing experiential learning the hard way that it's not to their extreme detriment.

Suzanne Bartholomae:

You're such a loving parent that way.

Mackenzie Johnson:

Oh, I hope. I hope that's what it is. But so two really important strategies we can tap into for teens is teaching these financial research skills as one of them but also still thinking about experiential learning, letting them have these opportunities of natural consequences, creating them, or encouraging them to get involved in places where they're at school. Maybe helping them opt into an elective that you know they might get some of these opportunities or something, but great opportunities to engage with our teens.

Suzanne Bartholomae:

And then a final one, the whole financial apprentice idea of mentoring, of mentoring your teen through a lot of these decisions and products or whatever it might be.

Mackenzie Johnson:

Yes, I'm so glad you said that one too, the financial apprentice. And I also feel like that reminds us that we're modeling every second, right? If we think of that, I have this little apprentice following me around for any financial things and like, ooh, if I make this choice with them, or in front of them. Yeah. Love that financial apprentice. Okay, love that. Well, we're mixing it up this week for our Stop. Breathe. Talk. segment. Usually, we've been having Mackenzie DeJong, our podcast producer, come in. This week, we have our friend and colleague, Barb. So in previous seasons, we love to ask Barb. Barb, what are you thinking?

Barb Dunn Swanson:

I am thinking what a great segment you gave me because we've been talking here about teens and you've been talking about parent modeling. And you're leading me right down what I want to talk about. Perhaps something we haven't touched on is, could there be conflict in spending with our teens? There could be. There could be. But what I want us to focus

Mackenzie Johnson:

There could be. a little bit on is exactly what you've been talking about in terms of parental monitoring. Parents who are watching what their kids are spending, or who have a little bit of knowledge about maybe what their kids want to be buying. When those parents Oh, yes. Big feelings. then model their own ability to spend around a budget, or save because of a budget, they model those things for their teens and those teens see those things. So what I want to talk about in terms of conflict is this. If we have a situation where maybe a teen spent some money that we as an adult might think was extravagant, or wasn't the best use of resources, or we should have saved that money as opposed to spend it. If we start yelling and shouting and getting upset, I don't know that the teen is going to hear the second part of our comments about why and what could we do differently next time? Or how can we resolve this conflict? But if we can stay regulated as adults first and then start a conversation about, let's talk through this a little

Barb Dunn Swanson:

And big feelings, big feelings. But what bit. Let's talk about, you know, this spending that happened, and why we made the decision to purchase what we purchased. Maybe it was a concert ticket, like you mentioned, Suzanne, and maybe we want them to kind of talk through that future planning that they're getting good at. They're, you know, they're able to start looking ahead to the future. And maybe as a parent, I need to say to my child, I wanted you to use some of that future planning because you know, you have some places you want to go and you want to take the car, but you're going to have to use those resources for gas. And now because you bought the concert ticket, now we don't have the resources, you don't have the resources for your gas. And so being calm and regulated as you have those discussions is going to help that young person stay regulated also. Now maybe in the beginning, they're going to feel upset that you're calling them out and that's uncomfortable. But if we can all stay regulated, our executive function will kick in. We'll be we can do is just to remind ourselves first, let's stay able to make some comments about, well, here's what I was thinking. And you know, you're right. You're right. Maybe I didn't use the best judgment here. What could we do? Help me regulated so that we can come out on the other end with a problem solve what we can do next time or what we can do now positive result. Yeah, so those are, those are the things I was to solve what's going on. But that whole point of conflict kind of thinking about as you were having that great around money can bubble up. discussion today.

Mackenzie Johnson:

Oh, that's such a good point. Because we, as parents, we can, right? It's like, why did you do that? It can be easy to get frustrated about it. And that's such a good point that the conflict is going to happen where our values and theirs maybe, or our goals for them, and their goals aren't going to align. And that's such a good point to like, we do want to think about staying regulated in those conversations so they can hear us.

Suzanne Bartholomae:

Right. Really valuable, Barb, I love it. And especially around money, that's one of the more difficult topics to stay regulated about. Right? It's one of the largest areas, I mean, a very frequent topic of discussion, disagreement, conflict in families and between couples.

Barb Dunn Swanson:

Suzanne, you're so right, even as couples try to discuss finances. And again, going back to that modeling, if kids see their parents or caregivers being able to discuss money in self-regulated ways, that's gonna go a long way toward their own ability to manage money and to discuss money topics in the future in self-regulated ways.

Mackenzie Johnson:

Yeah.

Suzanne Bartholomae:

Barb, I mean, there's evidence of, you know, normalizing the money topic in the family. There's evidence that it's linked to marital and partnership, like intimate relationship quality, later on. So you know, it's just the ability to communicate about something that might be a trigger topic or hot topic and so that carries forward to relationships. Great point. Love it.

Mackenzie Johnson:

Awesome. Barb's talking all about financial socialization. Yeah, you are, Barb. Awesome. Thanks so much for hopping in with us today and talking about what you're thinking about teens and money. Teens and money.

Barb Dunn Swanson:

You're welcome.

Mackenzie Johnson:

Aw thanks, Barb. So that kind of wraps us up today thinking all about, like I said, teens and money, how do we talk with them? What are we talking with them about? And so we learned about, you know, a lot of the development they're doing. We have our Jenga blocks, right, that they're intermingling and up to this point, right. They've built some of their executive function, and they've built some of their habits and norms. And in this teen years, they are really building a lot of their financial knowledge. So we can tap into that opportunity by thinking about them as our financial apprentice, by helping them learn some financial research skills, and by helping create, and as I said, letting them have these financial experiences and experiential learning. So so much good stuff here. Yeah, the opportunity to stay regulated in these conversations with our teens is so important. So what's coming next week, Suzanne?

Suzanne Bartholomae:

Well, in our next episode, we're going to talk about how to talk about money with young emerging adults. And so today's information was the age of 13 to 21. So there's going to be a little bit of overlap of what we talked about in a way today because you know, teens and at 19, right, and emerging adults, those two years. So we will be talking about the emerging adults next week.

Mackenzie Johnson:

Yes, we know there's so many, a lot of parents have questions about this time period that's kind of ambiguous, like it's kind of like, well, are they adults? Should they have this responsibility? Should I help? Like there's a lot of questions, confusion for parents in this young adult age group when their kids are at that age. So we're gonna dig into all that good stuff next week. But for today, thanks for joining us on the Science of Parenting podcast. Like I reminded you last week, we have lots of great stuff on our website, where it's broken down by age. So if you've got questions about teens, you can head to scienceofparenting.org and find lots of great resources on our teen web page.

Suzanne Bartholomae:

Yeah, so come along as we tackle the ups and downs, the ins and outs, and the research and reality all about the Science of Parenting.

Anthony Santiago:

The Science of Parenting is hosted by Mackenzie Johnson, produced by Mackenzie DeJong, with research and writing by Barbara Dunn Swanson. Send in questions and comments to parenting@iastate.edu and connect with us on Facebook and Twitter. This institution is an equal opportunity provider. For the full non-discrimination statement or accommodation inquiries go to www.extension.iastate.edu/diversity/ext.