Making a statement with money

When you think of teens, “willingly absorbs advice from parents” is probably not the first thing that comes to mind. And yet, here we are, charged with teaching our soon-to-be young adults about budgeting, saving, and using credit wisely. It’s certainly not something kids are guaranteed to learn in school. It’s not necessarily a subject that parents feel they’ve mastered either.

Minneapolis author and personal finance expert Nathan Dungan just wrote a new interactive book for families, Money Sanity Solutions: Linking Money and Meaning. I asked him for some tips on talking about money with teens. You can learn more about his money philosophy at

Kara McGuire: What is the biggest challenge that teens face when it comes to money?
Nathan Dungan: The biggest challenge for most teens is that they have never had any formal training in how to build healthy money habits — like setting money goals and developing a plan for reaching them, needs and wants, deferred gratification, learning to earn, and sharing money. When you combine the random nature of how teens learn about money with the overwhelming number of “spend” messages our culture directs at them, it shouldn’t be a big surprise why so many teens struggle with money issues — especially after they leave home.

KM: How should parents talk to their kids about money?
ND: Many parents feel overwhelmed with the task, partly because of their own recognition of past money choices. I often remind them that healthy money habits begin with a conversation. It’s not about having the single perfect conversation; rather it’s a series of discussions over many years.

It’s important for parents to understand that they play the single biggest role in shaping their child’s money narrative. If they abdicate the responsibility, the culture will step in and fill the void.

KM: How can parents strike a balance between telling their kids what to do and giving them room to make their own decisions and mistakes?
ND: It’s one of the reasons why I like allowances for needs. Why not proactively shift some of the accountability and responsibility to them while they still live at home? That way they can make some mistakes while the stakes are a little lower and in turn build their confidence around a variety of money skills.

KM: Any advice on dealing with peer pressure and income differences between friends?
ND: For teens, peer pressure will likely impact most of their spending decisions regardless of socio-economic status. Over the past 20+ years I’ve had the privilege of interacting with thousands of teens about the choices they make with their money. I love challenging teens to articulate their money values and then try to make choices that honor their values — be it how they spend, save, or share their money. In our 18-month research study of 100 parents and their children (most of whom were teens), we gained some significant insight. By the end of the study, the teens who were more prone to spending (which was the majority) had significantly decreased their focus on spending and significantly increased their self-esteem. It’s a great reminder that when you combine a little parental intervention with tools that help you proactively engage in money conversations, the outcomes can be pretty remarkable.

KM: How can we teach teens to be truly charitable?
ND: Kids need guidance and boundaries from their parents to help them build healthy money habits. It’s no different than instilling healthy eating habits. If you ask kids to choose between junk food and vegetables, they will always gravitate to the junk unless they’ve developed a palate for veggies. So too it is with money.

As a parent of young daughter, I want to help shape her money narrative, but not in ways that will stifle her curiosity. I want her to have a healthy confidence about money and all of the opportunities and responsibilities that come with the territory. While the benefit of sharing money with others is enormous on a number of fronts, it is just one part of the journey. I also want to help her understand that every time she saves and spends money she is making a statement about what she values and believes. That’s what my parents did for me.

Kara McGuire is a personal finance writer and a St. Paul mother 
of three. Send comments, questions and story ideas to