More than 90% of the things we do daily involves spending money. We spend money to eat, travel, to get an education, to have fun. Therefore the money talk cannot be underemphasized or avoided. It is also a fact that important life decisions involve money and it could impact how we manage how lives. This is why it is important to talk with teenagers about money. Teaching them how to manage money at a younger age would help them put a lot of things into perspective when making money decisions as they grow. They are able to understand and differentiate their needs from their wants as well as make smart spending decisions.
If you have a teenager and you are not sure on how to have the money talk with them, this post is for you. And if you are an adult and you still find it a bit difficult to understand your finances, you should read this post and learn one of two things that would help you.

When having the money talk with your teens, you should talk about the following at the very least;
How to budget money;
How to save money;
The values of spending and earn money.

How to Budget Money
Budgeting is basically how you allocate a particular sum of money to needs and wants to be met. Budgeting is what you do when you write down a list of things you want to buy with the cost of buying it. It also involves the money you set aside to save for emergency purpose or future plans.
When teaching teenagers how to budget, make use of real-life scenarios, you could use the monthly budget for groceries. Show them the list of things you want to buy, why some other things are not on the list and why some needs come before the other. You could go ahead and allow them to draw up the budget for the next month. Help them know that when budgeting for anything, the needs should always come first when the needs are met the wants can come after. In order words, they should not put ‘a new sneakers’ above ‘a new textbook’ that is more relevant at that time.

How to save money
There is an aspect of budgeting that involves saving. When allocating the money that goes to a particular need and want, savings is not excluded. In order to help them get it right from the start, set up a process for saving money in a piggy bank and regularly monitor how much has been saved, and talk to your teens about setting money goals on how they will use their money after they have been able to save it over a period of time. You could remind them that their trip to Disney land last summer would not be possible if you did not save for it. Teach them the rule of saving first before spending the rest on needs first and then wants.

The Value of earning and spending
This is one of the most important part of the money talk as it brings every other thing under into perspective. Teach them that money can only be spent if they are earned and how they earn it would help them make wise spending decisions.
The best approach to teaching them how to value earning is by helping them to earn. Give them a task to carry out around the house and pay them for it when completed to the letter. This way they understand that talent, skills, or time is usually given in exchange for money and hence help them value what they have earned. Helping them earn money would also help them make wise spending decisions as they would tend to spend the money earned on something of more importance than on a mere toy or piece of clothing.

When they understand the value of earning, they are able to manage the resource you provide to them.

Most importantly, give them some credit if they are able to stick to their saving goals to motivate them to do better.

However, if you need to help them understand money in terms of savings in a more realistic way, you could open a target savings account for them and at the end of the set tenure, they view the increase hence are motivated.