The Center for Financial Empowerment, the nonprofit organization founded by SCE Credit Union, has a mission to educate high school youth with personal finance concepts, preparing them to make smart financial decisions as they move into adulthood. As part of that mission, we encourage parents to take an active role in helping their teens establish strong financial habits for managing money.
The second post in our “Teach Your Teen” series tackles a core financial concept that sets a foundation for why your teen needs to develop strong money management skills.
Teach your teen how money relates to well being
Everyone wants to be happy. Whether happiness is a feeling or a choice, it can be said happiness accompanies feeling good about one’s life or having an overall state of well-being. While this concept of well-being includes physical, social, and emotional well-being, the idea of financial well-being is equally important since it touches so many aspects of life.
Anyone with a little life experience under their belt knows first-hand how money – or the lack of it – can affect their sense of well-being. Helping teens understand how their personal financial habits can positively or negatively affect their well-being can set the foundation for them to learn the skills for financial success.
It’s not only about having more
Having money does matter. It’s no surprise people express increased happiness as they rise from being low-income to middle income, but after that happiness increases at a slower pace as income continues to rise. In other words, after a person earns enough money to pay for living necessities, it’s not so much the amount of money, but what the person decides to do with the money that increases well-being. Managing money well is critical to a person’s financial well-being.
In addition to having strong money management skills, your feelings about money can have a big impact on your well-being.
- Comparisons – Feeling as financially secure as you perceive the people around you to be can impact your well-being
- Having enough – Being able to meet basic needs such as food and shelter without struggling will likely result in a higher well-being
- Communication – Having healthy relationships with positive communication about shared money has a significant impact on well-being
- Capability – Having confidence you’re managing your money wisely affects your well-being. Financial capability involves both knowledge about money, and the ability to use it to accomplish life goals
- Extras – Having the time and monetary resources to do activities you enjoy enhances your well-being
Creating positive financial well-being requires planning and discipline. Financial planning involves managing money continuously throughout your life in order to reach your goals. If you recognize that financial choices you make today have an effect on your future, you may be less likely to make poor choices with money and credit.
Help your teen learn more about how money relates to well-being with these additional resources directly from our lesson plans for high school students.
The Center for Financial Empowerment is a 501c3 nonprofit organization whose mission is to empower disadvantaged youth through financial literacy education. Find out more about our work at Center4FE.org.
References: Money In Your Life, Take Charge Today, August 2013