As you and your spouse work your way out of debt, it's a great opportunity to teach your kids about money. Especially teens, because in just a few short years they will out on their own. You don't want them to make any of the mistakes you made. You love them and you want the best for them.
Here are a few tips that can help you teach your teen about money.
1. Teach them to give first.
Teens are searching for identity and a sense of purpose. Being a giving person is an important part of their identity, and it can help them feel more positive and confident. It also helps them feel enabled to help others which gives them an incredible feeling. Giving can also keep them from going into depression when times get hard.
2. Tell them your story.
Be honest with them about your story, and where you went wrong. Tell them when and how you got into debt. Was it student loans? Credit cards? Car loans? Tell them how you'd do it again if you could do it over again. If you had emotional issues circling around the debt be sure to tell them the connection. This helps them connect their emotional state to finances in the future. For example, if you bought new clothes on a credit card to fit in with the crowd in college, share this with them, and let them know how it made getting out of debt harder.
3. Share with them the plan for getting out of debt.
Post a whiteboard in a place they can see, too. It doesn't have to be in the kitchen, but maybe it's in the master bedroom, and you bring them in every few weeks and show them your progress. This helps the kids see that you are on track to eventually finish paying off debts.
4. Help them start their own business.
This helps them learn about money AND helps them earn some, so they don't feel sad when mom and dad can't buy them everything they want. You should still buy them what they need (And plan for those things in the budget), but giving them an opportunity to earn what they want is really helpful for them to feel engaged in the process.
5. Teach them to spend less than they make.
Whether they have a job or their own business, it's important to teach them to spend less than they earn. Tell them that it's not how much they make in their job that matters, but how much they save.
6. Share celebrations along the way.
As you and your spouse pay off your bills, invite your teen to help you celebrate. When you reach an important goal, take them with you to dinner, or let them help decide what a good celebration would be. They may share with you that they would rather have a new pair of jeans. It's important to keep these lines of communication open because as you pay off debts almost everyone is making sacrifices. Let your teen tell you what they need and want along the way.
Teens have a lot of peer pressure to look great and wear the best-named brands, so they will be tempted to spend their hard earned money on these things. Make sure they know, beyond a shadow of a doubt, that their worth does not come from the brand on their clothes. Make sure they know that you love them unconditionally and that sharing these financial tidbits with them is just one of the ways you can help them build a solid financial foundation, so that later if they still want to, they can afford name brand fashions. For now, it's most important to share with them the value of financial wisdom and how it can help them have a better, easier life.