How can I help my teen plan for the future?

Today’s teens are often under pressure to make a place for themselves in the world – and naturally, this can sometimes leave them worried about financial security. Here we look at ways you can help them achieve their dreams and aspirations.

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Recent research* has revealed that 39% of young people between the ages of 16 and 25 don’t feel like they are in control of their own lives. This age group feels under pressure, and their biggest fears for the future are a lack of financial security, fewer job opportunities and a belief that they will need to work and save for longer than their parents to be able to put down a deposit on their own home.

Yet, despite this prediction of tough financial times ahead, 44% of 18- to 24-year-olds said they find money a difficult topic to talk about. So what can parents do to ease the concerns of their teens and prepare them for the future?

A natural reaction

To an early teen (aged 13-15), the future might look exciting, a time of independence, freedom and fun. It is only when that independence – a first job, leaving home or supporting themselves financially – is imminent (age 16-18), that the future suddenly becomes something to possibly fear.

According to psychologist Dr Carl E Pickhardt§, this fear of the future is a normal reaction to the unknown. It is part of the mind’s natural emotional awareness system reacting to a change in our world of experience – warning us of perceived dangers. And this is not a bad thing, it just depends how well prepared your teen is for this change and its new responsibilities.

Fostering self-worth

In any area of their life, one of the keys to preparing your child for the future is nurturing their self-esteem and showing them that you believe they are capable of making the right decisions in life and acting confidently and responsibly. A teen with stronger self-belief is less likely to give in to peer pressure, whether it’s skipping classes or running up debts. Your child may not be top of the class in Maths or Science, but if they have a hobby or subject they do enjoy, there’s a pretty good chance they’ll do well in another area. Qualities such as emotional intelligence, patience, determination and sociability are equally important to your teen’s future success.

Learning the hard way

Although financial education has been on the curriculum for secondary schools since 2014, they are often short of time and resources, and parental actions have been shown to have a far greater impact on a child’s financial capability in the long run. The best way for children to learn is by being given the opportunity to make their own mistakes, so stepping in to bail out your child every time they run out of money or make a wrong decision won’t allow them to learn financial independence. Key budgeting skills can be learned from the moment they first receive pocket money. But in this complex financial world, teens need the knowledge as well as experience to make the right decisions as they venture out into the world of work or college.


To help your teen with their financial planning, download our printable My financial plan activity sheet.

Saving for the future

There are many ways you can advise your teenager on planning for their future, whether that’s in the short term, such as planning and saving for a holiday with friends, or the longer term, such as buying their first car, saving up for a deposit on a flat or travelling around the world. All of them involve asking the same set of questions:

  • How much time is there before the future event – is it going to happen in the short term (within six months), medium term (within a year) or long term (five years or longer)?
  • How much money do I need in total?
  • How much money do I have now?
  • How much can I save each month?

Just writing down these key facts will lead to a conversation about prioritising and budgeting:

  • Could the event be postponed until I have enough money?
  • Can I achieve the goal in a cheaper way e.g. go away for less time, buy a cheaper make or model of car, or flat share with more people?
  • What can I manage without now or cut down on to save more money?
  • Is borrowing money an option and, if so, how will I pay it back?

These are common questions facing adults on a weekly or monthly basis, so by teaching your child to start thinking in this way as early as possible, you can help financial decision-making and planning for the future become a natural process.

Money diaries

The financial pressures of socialising weigh heavily on today’s teens, with 26% of 18- to 24-year-olds confessing to feeling pressurised into attending events due to FOMO (fear of missing out) and 9% of 25- to 34-year olds saying they have previously attended social events they couldn’t afford just so they could post it on social media. But social media isn’t all bad – the advent of ‘money diaries’ has caught the youth zeitgeist. It is encouraging people to speak openly about money and financial worries, thereby avoiding the stress and isolation it can cause. As a parent you can build on this changing attitude by discussing budgeting and financial decision-making with your teen from an early age in their home environment.

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Planning for the unexpected

Another way you can advise your child in their move towards independence is by preparing them for unexpected expenses. Insurance is something that may not be on their radar or perhaps they are unaware that certain types of insurance are a legal requirement, such as car insurance. It can seem a lot of money to pay out for little return… until something happens.

A dropped laptop will disrupt their studies, a stolen bicycle or set of work tools will affect their income, and few teens would be without a mobile phone for long, so discussing insurance before any big life change is a must. Encourage them to do some research, although it may be cheaper for them to be covered on your insurance initially, so this could be something to look into.

Sources: *Prince’s Trust Macquarie Youth Index 2018; †Generation Worry: 18-24-year olds more worried about their finances in 2019 compared to older Brits 2019 (RBS); §Psychology Today 2018; ¶How families teach children about money 2019 (MAS)
Image credits: iStock

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