Your Teen recently spoke with Clint Greenleaf about his new book, Beyond the Piggy Bank. Greenleaf identified a problem—we aren’t teaching our children financial responsibility. In his book, he guides parents through teaching teenagers about money.
Q: Why are you so passionate about teaching finance for teens?
Greenleaf: The average credit card debt per household in the United States is almost $16,000. In total, Americans owe almost $12 billion in debt—and those numbers keep rising. We can either let our teenagers walk down the same path, or we can give them an immense leg up if we talk about how to manage money at a young age. Learning to use money responsibly can give our teenagers a lifetime of freedom.
Q: What’s the biggest hurdle to financial intelligence?
Greenleaf: The biggest problem is recognizing entitlement. While the entitlement mindset comes from love, it’s such a mess when you think about it. You love your kid so much, so you want to save them the hassle of financial responsibility. You don’t want them to deal with getting a job at a young age. They’re only kids so you want them to have fun, right? Wrong. You have to vaccinate them against entitlement. The real way to do that is to give them a really crappy job at a young enough age that it sticks.
Q: Why does it have to be a lousy job?
Greenleaf: I painted the light poles at a local mall. That was a miserable summer job. I hated it. After two hard summers of doing that, I started to apply myself in school. If you look at my grades from freshman to senior year, it was a dramatic improvement. For me, it was the reality that I wanted the opportunity to have a different career trajectory.
Q: Are there other benefits?
Greenleaf: There’s nothing like a hard day’s work. The manager at Starbucks doesn’t love your teenager the same way that you do. A manager is not going to forgive your teenager for showing up late. She’s not going to understand when your teenager doesn’t take care of his or her responsibilities. And when the work is tedious or tiring, parents should say hard things like, “No, you’re not going to quit this job. You made a commitment to do this, and you’re going to stay with it through the summer. You can get a different job next summer.”
Q: Financially comfortable families may have a hard time convincing a teenager (who knows that his parents have money) to work.
Greenleaf: It has to become values-driven. You have to say, “Our family policy is that every kid gets a job at 16. We value hard work, and we’re going to push you to do this.”
Q: Are you a believer in allowance? How should parents approach that?
Greenleaf: Yes. Start with young children and continue until your teenager gets a job. When you give kids money, you want to watch what they do. If they’re making decisions that you don’t agree with, you can try to offer guidance. But you have to let them make mistakes. When you give them money, you have to let go of it.
Q: What steps can parents take to learn more, especially if they don’t feel that comfortable themselves with money management?
Greenleaf: Other people can teach certain things to your kids, or you can learn more on the topic. You may know an investment manager who can teach your kids about investing. You may know a banker who can take your kids on a field trip on a Saturday morning, go to a bank, and see how it works.
There are tons of resources. Go to your local community college, and take an entry-level personal finance class. Start reading personal finance books. Most importantly, go to a banker or financial advisor and take them to lunch. Let them talk to you about your finances. Listen to them in areas where you might have some holes.