Most high school students don't spend their time fretting over mortgages, stock prices, or their 401(k) plans, but they are at an age when smaller financial responsibilities start creeping into their lives. Many teenagers earn allowances and begin working part-time jobs, so they need to make decisions about what to do with their money.
High school students "also begin to have a lot more of a social life," says Margaret Magnarelli, senior editor of Money magazine and author of the textbook Per$onal Finance. "They might have a car and access to shopping and restaurants. And if they don't have a car, they want a car."
Teenagers often have many desires, but they must figure out how to allot their money for the things they want, says Magnarelli, who believes the first step to their financial understanding should be taught by parents.
"When you're shopping, and your child says, 'I want X item,' you can put that item into context," says Magnarelli. "Ask, 'what would it take for you to save up to buy that? How many hours of your part-time job would it take to achieve that?"
Parents can also help their kids understand financial responsibilities by being transparent with their own money decisions, says Magnarelli. For instance, she says parents can say, "We are not able to go to Spain for vacation this year, because if we did you couldn't go to basketball camp. So we're going to the New Jersey shore instead."
Other ways parents can teach financial responsibility include helping their kids set up a bank account and playing online stock market games, says Magnarelli.
Teachers can also play a huge part in preparing students to make financial decisions, says Magnarelli, even if the school doesn't offer a personal finance course.
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"It's a practical skill that fits nicely into a lot of [curricula]," she says. "These kinds of lessons can be incorporated into other topics easily and smoothly."
Magnarelli explains that a math teacher could show compound interest, or an economics teacher can talk about finance on a micro level. One of the teachers who reviewed the Per$onal Finance book brought newspaper clippings into class and discussed personal finance that way, she says. He would show an article about a car accident, for example, and ask how an incident like that would affect the students' money decisions.
Financial lessons taught by both parents and teachers will go a long way in helping high school students in the future, says Magnarelli.
At this age, she says, "There are a lot of responsibilities that are building into what's going to be a bigger responsibility as they graduate from high school—whether they're going into college or whether they're going off into the working world."
After high school, Magnarelli says, students will have to think about how much money they make, how much of that income goes toward taxes, and how the rest of the paycheck will cover rent, food, entertainment, and other expenditures.
"They're probably not conscious of that yet—of the financial commitments that are coming up—but that's why it's important to be teaching them these skills about managing the money that they have now."