In my ten years of youth ministry I have enjoyed the privilege of working with many smart, creative, and thoughtful teenagers.  I fully believe that teens too often get stereotyped by perceptions that are perpetuated in media and myth.  One interesting thing I have noted over the years is that many teens have a lot to learn when it comes to money.

This post isn’t bashing teens at all.  In fact many of the kids I work with are smarter than I was at their age.  But when we talk about budgets, mortgages, interest, etc. their perception of the realities of the financial world leave some room for growth.

You might be thinking, “Why is a youth minister talk with kids about money in Bible class?”  I take Matthew 6:24 very seriously – “No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.”  I’m not teaching some sort of ‘gospel of prosperity’ in Bible class, I am teaching the reality that debt is a burden, or a ‘master’ as the text puts it.

Our Bible class is currently in a study about attitudes towards the poor and the Christian perspective on materialism.  Yesterday I started class with the example of a $100,000 mortgage for a home.  Granted that is a pretty cheap home, but it was an easy number to work with for 30 and 15 year rates.  I asked how much the monthly payment on that home would be and answers from the class ranged from $2,000 per month up to $6,000.  The class was a bit surprised to find out that in reality the monthly payment would be in the $450 to $500 range.

We then talked about interest.  I popped up an amortization table for the 360 monthly payments that showed the interest on the loan piling up to around $55,000 over the course of 30 years.  Their eyes got real big…because those are some big numbers.  We then looked at the 15 year mortgage that cost an extra $190 a month but saved $30,000 in interest.  Then we talked about an additional $300 per month in property tax and another $100 per month in home owner’s insurance.  I think it was the first time many of them had looked at a practical example for the cost of home ownership.

One perceptive young many asked about renting.  We used the example of a $500 apartment for the course of three years.  At the end of three years $18,000 in rent would have been paid.  The renter received a place to live as a return but hasn’t built any equity in the property.  We quickly discussed that renting is a good fit for certain times and situations in life and then moved into our text for the morning.

I write all this to emphasize to parents the need for educating their children about money.  The teens in my class are just a few years from being out on their own and desperately need to learn these financial lessons.  Following are some ideas for educating teens about money management.  I’m using several of these with our 6 year-old and I’d like to hear what you are using in the comments section below…

Transparency.  Obviously you have to know your child and what information they are capable of managing, but sharing some of the monthly expenses is a great place to start.  How much is the electric bill?  Why does it cost that much?  What can be done to reduce it?  Share some of the other monthly expenses that it takes to run your household.  I have found that a good number of teens are shocked by the reality of the basic expenses of running a household.  Decide what areas of the finances you are willing to share and recognize that mistakes can be a valuable teacher for your children.

Budgeting / Tracking.  Everyone has different ways of managing their money.  Some just let it come and go, but others have a household budget or track expenditures to keep an eye on finances.  If you have a system, consider sharing it and explaining it to your children.  Don’t have a system?  This would be a great time to start and use it as a learning experience for the family.

Responsibility.  A typical syndrome for teens is ‘burning pockets.’  I have seen many a teen that gets a little bit of money in their pocket and it seems as if it is burning a hole in there and needs to get out as fast as possible.  Transitioning financial responsibility to your child is a great teacher.  I have been intrigued by Mike Nichols who pays his 8 year-old daughter an allowance of $25 a week, but she is responsible for all her clothing, shoes, and personal items.  Does she make spending mistakes?  You  bet!  But has she learned a lot by managing her own funds?  Most definitely.

Giving.  Most teens are amazingly generous.  Nurture and build this natural tendency as financial lessons are taught.  Share with them the flexibility that financial freedom can allow when it comes to helping others and being benevolent.

The Basics.  Don’t forget to hit at some of the basics with your teen.  Explain debit cards – what they are, how they work, how to be safe with them.  Explain banks – how they work, the business side of banking, why they need one.  Make sure to highlight some of the financial groups that love to target young adults – credit card companies and payday loan companies.

The Christmas break is a great time to get a jump start on educating kids about money.  We are currently exploring some ideas for helping our 6 year-old better understand money and how to manage it.  Young or old, it is never too late to learn more about money and how to wisely use it.  Teens and money can be a great thing!