By Mary Helen Berg
My older daughter’s classmate invited friends to fly on a private jet to see Mick Jagger perform at the Super Bowl. My younger daughter’s classmate declined a movie outing because her mom didn’t get paid until the following week. Friends with money, and friends with no money. These examples of financial differences may occupy different ends of the economic spectrum, but both scenarios raised complicated feelings and questions for my teens.
While your teen may be able to discern a friend with money, or tell you which friend lives in the fanciest house or totes the most expensive bag, they may not understand how money—or lack of it—can complicate relationships. Teens confronting friendship economics for the first time may not have a clue how to handle them, says Dr. Mary Gresham, a financial psychologist based in Atlanta.
A Friend With Money
“They get embarrassed in both directions,” Gresham says. “The highly affluent teens with more money than their peer group, the less affluent teens who have less money than their peer group—they’re all embarrassed and ashamed of what they do and don’t have.”
These simple strategies will help your teen navigate money matters among friends and feel more comfortable with their own financial situation.
TEACH DOLLARS AND SENSE
Instill your values and attitudes about money in your teens “so they don’t equate self worth with net worth,” advises Neale Godfrey, chair of the Children’s Financial Network.
When teens desperately want to blend in, remind them that each family’s economic situation is distinct, adds author Beth Kobliner, a member of the President’s Advisory Council on Financial Capability for Young Americans.
“You can explain, ‘That’s not how our family chooses to spend our money,’ and then talk about what your family does value, even if it’s not material—like spending time together watching movies over the weekend,” Kobliner says.
GIVE THEM WORDS
If your son or daughter has an affluent friend with money, provide your teen with vocabulary to gracefully decline an event that might break the bank. “I’d rather do something else,” or “That’s not how I want to spend my allowance,” are both acceptable and truthful ways to avoid overly expensive outings, suggests Gresham.
If money talk becomes too awkward, your teen can say, “I don’t feel comfortable discussing this,” advises Variny Yim, regional director for Jump$tart Coalition for Personal Financial Literacy. “It’s teaching your kids that they have a choice in the matter.”
Fun doesn’t need to cost a fortune. When a friend with money proposes another expensive night at the movies, your teen with more modest means can suggest a Netflix marathon complete with homemade popcorn. Restaurant lunches too pricey? Try a picnic in the park.
On the flipside, affluent parents whose teens take costly outings for granted should coach their kids to be sensitive and flexible, Kobliner says.
“You need to have discussions with your kids about respecting what their friends can afford and opting for less-expensive activities if need be,” she says.
If your teen generously wants to foot the bill for a less fortunate friend, acknowledge her kindness but offer to help negotiate what may be a sticky situation, suggests Kobliner.
“If it is an activity that is expensive and you, as parents, want to help out your child’s friend, make sure to do so in a low-key way that gets the friend’s parents’ sign-off,” she says. “Otherwise your kind gesture might be misinterpreted as being pushy—or worse, insulting.”
Practice “courage-building exercises” with your teens to help prepare them for uncomfortable money moments.
“This is a skill they have to learn; this is a muscle they must work,” Yim says. “Awkward money situations are going to arise. The goal is to simply give your kids the courage, the words, and the ability to not beat themselves up for something they have no control over. That’s the bigger life lesson.”