Growing up in a financially struggling home, for instance, a teen or young adult might develop behaviors related to overworking out of the fear of going broke. Money disorders may also come in the form of anxiety or extreme concern about the financial impact of recent events, which many of America’s teens are going through today. If you suspect that your teen has a money disorder, the first step to helping them is recognizing the signs.
The Signs of a Money Disorder
According to Brad Klontz, author of “Mind Over Money” and associate professor of practice in financial psychology at Creighton University, there are six types of money disorders to watch out for:
Financial Denial: This is when someone refuses to think about money altogether. Teens who tend to do this want to minimize the problem in their heads.
Financial Rejection: This can manifest as a feeling of guilt whenever your teen receives money or gifts.
Hoarding: Obsessively collecting high-value objects or money itself can lead to a feeling of security, which may stem from struggles early on in life.
Compulsive Buying: When people use shopping as a temporary escape from real-life worries, it can result in overspending which can spiral out of control.
Financial Infidelity: Your teen may also hide their financial activity from you, believing that it is going to cover up the problem.
Financial Enabling: The compulsive tendency to give money or treat others even when they can’t afford to can make it difficult for teens to save.
If your teen exhibits one or more of these disorders, there are many ways to help them overcome these patterns and build a stronger future for themselves.
Tips for Teaching Teens to Manage Their Money
Develop and stick to a family budget. A budget is the single most powerful financial tool to rely on. And if you can teach your teen to live within their means, you can start correcting both compulsive overspending and hoarding. Teach your teen to determine how much they actually have and need to spend on a daily, weekly, and monthly basis. This will help introduce control and eliminate financial mistakes and uncertainty from their regular spending habits, as we covered in our post ‘Action Speak Louder Than Works’.
Hire a family financial advisor. The better you are at handling your own money, the better you can advise your teen about what to do and what to avoid. "Clients that have been more transparent with their kids tend to have children that are smarter with money,” claims certified financial planner and senior vice president at Univest Wealth Management, Bill Van Sant. "Parents that may not be as transparent tend to have children that stay in the house a little longer."
If you’re interested in hiring a financial planner for your family, you can easily find one online. CNBC states that accounting and finance positions are among the most in-demand remote-friendly jobs. This is due to how accounting itself is becoming more remote in order to accommodate emerging business needs in the new normal.
In fact, e-learning certifications and online courses or degrees are considered to be advantages. Indeed, it’s not uncommon for accountants, auditors, budget analysts, and financial advisors for either individual clients or enterprises to be online accounting degree holders. Apart from being highly in-demand, these remotely-trained financial specialists are also used to facing clients online. This gives them more flexibility in terms of consultation hours, which means that they’re generally more open to negotiating hourly rates.
Nowadays, it’s easier to look up different freelancing specialists to find the right fit. And by hiring the right financial planner or advisor for your family, you can start transforming your family’s financial future for the better.
Live below your family's means. Whether you’re poor or rich, living below and well within your means is a good strategy for slowly but surely solving money-related issues. Teens are very good at picking up behaviors from their parents. And if your whole family can live within their means, get the advice of a financial planner, and stick to their personal budgets, your teen can be well on their way to overcoming money disorders.