Let's look at the financial principles we should teach our 14- to 17-year-olds, including ways we can help them earn income, and also how to sort through many higher education opportunities without incurring insane amounts of student loan debt.
It is easier to build strong children
than to repair broken men.
— Frederick Douglass

Many of us parents can probably look back at our financial mistakes and the destructive financial habits we have formed over the years and quietly wish that someone would have shown us a different path. As we struggle to turn our financial mistakes into victories, we have a unique opportunity to help the next generation learn from us. We still have time to help our children understand the long-term benefits that solid financial habits offer.

Living within your means

This simple principle of living within a monthly income is critical to grasp, and it will set your teenage child apart from many of his or her peers. At this age, children are starting to generate more income, and many look for summer jobs. It is important that your teenager learns this lesson now. Once boundaries are set, help your student prepare a spending plan that outlines how every dollar of their income should be allocated. This is also a great way to protect them from accumulating debt. There are free online apps, such as Mvelopes, to help your student set up a budget that even syncs up with their mobile device. Technology can be a great way to get them "hooked" on budgeting early on and actually have fun with it!

Can I say no to my wants?

Teenage years can be very tough, especially considering the peer pressure to keep up with the latest trends or tech toys. So it's during these ruthless teenage years that we as parents should press hard to instill and cultivate the habit of saying "no." The ability and the emotional "guts" to refuse what seems so appealing will give your teenage child a great financial upper hand in life. It will give them financial freedom and financial options. Those who fail to develop this habit will most likely live paycheck to paycheck, stressed over debt and over their financial future. So, talk to your teenager about the essentials and non-essentials of life and how overemphasizing and overspending on the non-essentials can destroy someone's financial future. Using yourself as an example is always encouraged! Share what you've done right, and don't be afraid to share what you've learned from your mistakes.

The principle of saving

piggy bankSavings is one sure way to break the debt cycle and to create financial margin in life. Sharing your success or failure in the area of saving can help kids relate to the concept in a more tangible way. At this age, you can start delegating more of the responsibility to pay for certain major items your teenage child may want back to them! This alone will force them to think twice before they spend their cash. Now it's your turn as a parent to say, "You can have it if you pay for it!" Opening a savings account that has certain withdrawal limits can be a great way to help your child save money.

Creative ways to generate income

With age, your children can look for ways to perform various services to generate income. Sit down with your child and think through a list of jobs they could do for neighbors and family members. Help them determine what tools they would need to perform the job and how much those tools would cost. Determine competitive pricing for each job and let them go out and get some business! If your neighborhood has a newsletter, ask your child to create an ad and ask about the possibility of including their service ad in the regular neighborhood newsletter.

Because of their familiarity with technology, this age group is also a perfect candidate to be introduced to an online budgeting tool in order to manage their income in a way that's familiar and natural to them. Here are some ideas to get you started:

  1. Car washing can be a great way to generate extra income. Your child could offer single car washing options as well as car washing packages that would offer a slightly discounted price.

  2. Dog walking or dog sitting could be another way to generate revenue. Kennels can be expensive, so your child could offer dog sitting services that would include daily feeding as well as daily dog walking before and after school.

  3. Babysitting is always a sought-after service, especially when there is an opportunity to hire a trusted neighbor. Help your child create a nice flyer that showcases the benefits of hiring them as a babysitter.

When you're ready to start talking about college…

Before we talk about saving money, there is another critical question that both parents and students should ask as they enter the season of looking at higher education options. Will this degree program lead to marketable skills? Unfortunately not many are addressing this issue, and as a result, too many young people graduate with degrees that won't help them land good-paying jobs. Money isn't everything, but you'll want to make sure it is part of the equation while your child is considering career choices. They will want to know if the lifestyle they envision for themselves can be afforded based on an average salary for their field of choice.

Time is money, so don't waste it!

Before looking at schools, help your child figure out how they are wired and what their natural strengths and weaknesses are. Use that information to choose a degree that will utilize those natural gifts and produce marketable skills. Don't let them be the proverbial blind squirrel that's "hoping" to find a nut! There are many great career and life coaches who can help your child discover their unique design. Making a small investment in an assessment and a few coaching sessions could save you and your child time, money and frustration in the future.

Earn it

If you do what you love, you'll never work a day in your life.

Graduating one year later with no debt is far better than graduating on time or early with tens of thousands of dollars' worth of student loan debt. Working while studying will give your child the opportunity to get a degree and experience. Many employers are looking for a minimum of one to two years of experience. Choosing this path may actually give your child an upper hand in landing a job upon graduation. Working while going to school can also help them get a handle on what they enjoy and what may not be the best fit for them. I'm sure you've heard this many times: "If you do what you love, you'll never work a day in your life." So help your children catch a vision for the future, and not just for the next four or five years of life.

Should I stay or should I go?

Choosing a local two-year college and then transferring to a four-year school is a very common practice that allows for cost savings. According to U.S. News & World Report, the average cost of out-of-state tuition for the 2011-2012 school year was $17,785. That's more than twice the cost of in-state tuition and fees, according to College Board. That does not necessarily mean you'll always pay less if you stay local. Here are a few things you can do to cut the cost of out-of-state schooling:

  • Ask for a tuition waiver. You'd be surprised at how many schools offer this option.
  • Check out border states. In some cases those states will offer in-state tuition.
  • Alumni benefits. Your child may qualify for special tuition waivers if you graduated from the school.

About the author^

Steve Smith author headshotSteve Smith is the CEO of Finicity, the maker of Mvelopes budgeting software. He has strong strategic and tactical business skills and combines them with a passion to develop products and services that make a positive difference in people's lives. Prior to co-founding Finicity™, Steve served as a senior member of the executive team at Megahertz Corporation, the world's leading supplier of data communication products for mobile computers. At the close of his nine-year tenure, Megahertz had more than 1,200 employees and claimed more than 50 percent of the North American PC Card market. Most recently, Steve led the acquisition and management of an industrial engineering and manufacturing firm with offices in Canada, Europe and the U.S. Under his direction, the company became a leading supplier of critical service control equipment for chemical and petrochemical plants. Steve holds a Bachelor of Science degree in Finance from the University of Utah.

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