Many households don't tell their kids anything about incoming and outgoing finances, yet it's a private pressure that quietly simmers amongst most Kiwi families. When kids reach adolescence they have the mental capacity to handle serious conversations about family life, and this is the time to show them what comes in, and what goes out, in your home.
Tell your kids about your salary and show them the breakdown of your take-home pay. There's no shame in it. Explain your mortgage payments, rates, and insurance costs and how they impinge. Help them understand "rainy day funds" for things like a new cam belt or a ceiling repair. It will be invaluable for them to see how little is actually left for discretionary spending.
Talk about taxes
One thing I never learned as a teenager was how much tax I'd be paying as an adult. Nobody told me that taxes go up and down with different governments, or about claiming tax back on business expenses. I didn't realise the tax brackets and how they worked either, or how they shaped social perceptions between the richer and the poorer.
These are all actually easy-to-consume concepts that you can teach your teenagers about. It may also give them some appreciation about being a child living under someone else's roof and not having to worry about it yet.
Talk the language of money
Economic literacy starts at home. Economics is essentially another language, and a person will never be proficient from just their schooling unless it's a language spoken at home.
Discussions on complex issues like the wellbeing budget or GDP movement will only make sense if explained and discussed in the natural language of the family. Even if only ten percent of economic discussion gets through, that's still a significant advantage for any youngster.
Use vouchers and check specials
No matter what it is in retail, there's always a way to shop around for the best deal. Petrol can always be made cheaper with vouchers. Fresh produce is most affordable when bought in-season. Discounts are good to snap up when they're products you generally use, but it's easy to get caught up buying items you don't just because they're on special.
Have your teenagers walk the supermarket aisles with you and ask them to find the best deals on your household necessities – it's a lesson that will stick with them forever.
Force them to get a job
I've been working since I was 14. My first job was laminating maps in a bookshop, then I spent the remainder of my teenage years slicing onions for a Thai restaurant and delivering takeaways.
A lot of teenagers have extra-curricular activities such as sports and music which take up their spare time. Would some of that time be better spent getting into the working world earlier? There's a lot of value in getting professional referees on your CV early and learning to be around adults in a service-based environment. It might feel less fun than being on the rugby team, but you'll learn better life lessons from it.
Proportional saving
Teens have a significant advantage on their side compared to their parents: age. The sooner they start saving, the more they'll have. Also, starting early enough means you won't have to save as much.
Saving for your retirement from your part-time job at age 15 with one per cent of all earnings is a much smaller pinch to feel than having to put away eight per cent from age 45. Plus, the accrued interest will see those savings grow more significantly as the years tick by.
