I was captivated by a recent Wall Street Journal article entitled, “Should Parents Involve Their Teenagers in Big Spending Decisions?” The article featured two financial advisors with opposing views on this question. I thought I’d weigh in.
Lazetta Rainey Braxton, co-CEO at 2050 Wealth Partners in New York, basically says that “if done right, it can be empowering and educational,” while Michelle Perry Higgins, a financial planner and principal at California Financial Advisors in San Ramon, Calif., says teenagers shouldn’t have a say in these decisions.
Ms. Rainey Braxton is basically taking the tack I espouse – a voice does not equal a vote! This is my way of reminding families that simply by opening discussions about important topics, like money, parents do not give away control of ultimate decision-making. Conversations with teens about, for example, planning a vacation allow for discussions about budget, purpose of vacation (Simply fun? Social impact? Both?) and more. So teens don’t come to believe vacations appear out of thin air, these conversations can teach about various choices and costs and the values parents place on these choices. For example, what is the cost of driving to the airport and paying for a week of parking there versus taking a modest car service versus a limo?
Ms. Rainey Braxton encourages parents to respect the discernment and judgment of teens. I generally agree with this particularly when parents have done the right things during the earlier years – taught responsibility, respect, accountability, gratitude, and how to earn and manage money. And while she encourages parents to gather input from teens on the ultimate decision and to explore why they lean a certain way, she is clear parents are the ultimate decision-makers – and I agree.
On the other hand, Ms. Perry Higgins starts off making the point that when thinking about whether to involve teens in big spending decisions, one must be clear on the meaning of the word “involve.” I was with her up to that point. She goes on to say there should be a delineation between educating your teenager versus giving them the opportunity to have an actual say as to what purchase should be made. That’s where she loses me a bit as I believe soliciting their input can be a valuable teaching moment when done well and that they should not have full and final control. And then, “Teenagers should not have control over your spending decisions, or even much in the way of input.” She lost me.
If a voice does not equal a vote, every major event and decision in family life is an opportunity to teach, develop character and impart values. By opening discussion and including views of teens, parents show them respect and support them as burgeoning competent decision-makers in their own right. Would it be better to leave them out of these discussions, and miss gaining the related experience? I think not. And how will they make these kinds of decisions when they are older with no context or practice?
Those of you familiar with my thinking and work in the realm of parenting in the context of financial success will not be shocked to learn that I find Ms. Rainey Braxton’s advice refreshing and enlightened. It seems to me the views of Ms. Perry Higgins are outdated and miss the most significant opportunities to educate and develop character in teens.
My wife and I shared our tax returns with our sons when they were in middle school. Some numbers left them wide-eyed and wondering if we were rich. When expenses such as health insurance, mortgage and TAXES were shared, they got some perspective indeed. It was also a chance to show some amounts, impressive to them, which we could not touch or spend for 30 years – retirement contributions. And this was a great conversation about saving for the future, the benefits of being in business for ourselves (providing access to methods of saving taxes and saving more for retirement) and the risks and stresses (not having a big company to fund a pension or contribute to a 401K and having to develop business or not get paid – which brings us back to saving and living within our means).
We have tried to walk the walk with our sons as I educate and coach parents around raising children in the context of financial success. Another example is our family vacations. We took a cruise when they were young and had a stop in Haiti on a little pristine section of the island. We explained to our sons that everything would look like paradise – clean and beautiful. We also taught them about the poverty and the devastating earthquake that recently occurred. We did not want to make them feel guilty but to put our family’s financial situation in context. We told them there would likely be a big fence out of sight separating us from locals -and we searched and found it. We also told them that our cruise ship brings money to the country and it does not always make it to the people who need it most, but that we could walk to small villages and buy locally-made items and better distribute dollars to those who need them most. We also shared that some negotiation is acceptable in outdoor markets in the U.S., but that because our money is worth so much to the locals in Haiti and because they are so poor and desperate, we would not negotiate; we would accept their price as long as relatively reasonable.
Professionals serving families have varied philosophies about raising children, instilling values and talking about money. Ms. Rainey Braxton’s approach is very similar to the approach I’ve shared when coaching financially successful parents struggling with how to raise productive kids of character and how I’ve raised my own kids. In my experience, it is powerful and positive.
Check out the article and please share with me any thoughts!