personal finances — May 07, 2012

First Steps on Responsibility Road

by Bob Williams

Teaching teenager about financesWe'll be honest: young people nowadays learn a lot more now than when we, ahem, more "experienced" folks were their age. But while many of today's young adults are comfortable with texting, Skype, Twitter and such, the skills one needs to live in the Real World are frequently a little lacking.

Just because they know their way around Facebook, doesn't mean they can keep a checkbook balanced, for example.

Caution! Geezer Alert! The Following Verbiage May Sound Like Your Grandfather!

It's not anyone's fault, really. People just don't fall out of the sky knowing how to keep a household, keep track of finances or even pay taxes. The problem is, many times we parents forget to give the younger generation the tools they need to operate on their own.

It all sounds pretty basic, but it's true. Many times we don't educate our youngsters so they can safely navigate that minefield called Life. One co-worker once told us, "I can't be out of money. I still have checks left."

The sad part was, she was serious. It's another case of economic whiplash. One day, these kids are in school, living at home, only a part-time job and hardly a care in the world. They blink, and Wham! They're on their own, with rent, full-time job, a car payment; maybe they're even married with a child. And yep, they have to do their own taxes.

And they're lost.

The School of Hard Knocks can be a pretty tough road sometimes, and it's not all that efficient. To us, it makes much more sense to prepare our young people for the everyday practical challenges life presents -- before they find themselves knee-deep in overdraft notices.

Here are some general guidelines we think can help guide our young adults in making logical, positive choices in their new lives as Productive Members of Society:

Know Your Way Around a Checkbook

Some of us didn't see the business end of a checkbook -- the register -- until we were out on our own. It would make sense for parents to set up a register of sorts so kids could track their allowance, their spending -- and their balance. OK, we understand that some folks think paper is SO old-school, so you could do it on the computer as well. The point is that youngsters understand where their money comes from -- and what happens when it runs out.

Get Advice from a Veteran

Those of us who've "been around the block a few times" can be a great source of knowledge for soon-to-be taxpayers. Take that son or daughter about to head to college or work aside, and go over your economic routine with them -- paying a house note, figuring property taxes, maybe even the finer points of car maintenance. Resist the temptation to lecture; instead, educate. We think just being familiar with the personal finance process can enable young adults to make better choices.

Team Up to Tame the Tax Monster

If you do your own taxes, have your "student" sit with you while you go over the forms, whether paper or electronic. Understanding how the process works will cut down on the intimidation factor. One of the lessons here should be to file on time every year. The best way to avoid tax worries is with preparation.

If you use a professional tax preparer for your yearly taxes, introduce your youngster to your preparer. Your youngster might choose to take the same route, and familiarity could work in everyone's favor. Many long-term relationships have been formed in just this way.

Give the Gift of Organization

Whether it's a purpose-made financial document storage system, a set of file pockets or just a cigar box, give your young adult a way to start his own record-keeping system. Organizational skills are important, whether going off to school, the military -- or setting up his own housekeeping for the first time.

Those are a few thoughts to get you started. Of course, you probably have more lessons you'd like to pass on. Hopefully, the more knowledge we hand over to the younger generation, the fewer mistakes they'll make.

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