If you’re looking for books on how to raise money smart kids, plenty of titles are geared to parents. But money books for teenage readers … not so many.
That’s why it was a pleasant surprise for me to see the recent arrival of two new titles — written by veteran personal finance experts — that appeal specifically to teens who need to learn the basics about money and finance but may be intimidated by the topic.
“The Teen Money Manual: A Guide to Cash, Credit, Spending, Saving, Work, Wealth and More” by Kara McGuire (Capstone Young Readers) and “O.M.G. Official Money Guide for Teenagers” by Susan Beacham and husband Michael Beacham (Money Savvy Generation) are packed with user-friendly information that make dollars and cents understandable for younger readers.
Both books can be completed from cover to cover in an hour or two. And each includes plenty of worksheets, charts and other visuals for hands-on lessons.
In “The Teen Money Manual,” McGuire zeroes in on four topics: earning, saving, spending and protecting your money. And she drills well beneath the surface on each one in the 208-page book.
In writing for a teen audience, the personal finance columnist for the Minneapolis Star Tribune avoids financial jargon and assumes nothing. For example, the author walks readers through such terms as compound interest, investment diversification, inflation, gross pay versus net pay and the Federal Insurance Contributions Act, otherwise known as FICA on your paycheck.
McGuire also mixes in savings advice for teens — for example, pay yourself first. As for how much to save from each paycheck or allowance, she recommends simply picking an achievable goal. What’s important, McGuire said, is to develop the savings habit.
She also explains the notion of buy and hold investing in stocks and talks about the tradeoffs between reaching for higher rates of return and the risks that go with it.
If there’s an underlying theme to McGuire’s book, it’s that setting goals, having a plan and operating with a set of values go a long way toward making smart decisions about money. Those may not be concepts on the minds of many teens, but the book provides useful tools such as budgeting worksheets to jumpstart the thinking.
Some of the same messages about money are found in “O.M.G,” co-authored by the Beachams. The couple, who launched the Money Savvy Generation financial education company in 1999, said in the book’s introduction that their goal was to give teens “the basic knowledge of what it takes to successfully manage your money for the rest of your life.”
What are some of the pointers teens can glean from this book? The ins and outs of budgeting, how to choose and buy a stock, the pros and cons of debit and credit cards, how to check out a charity before making a donation, and ways to keep identity thieves at bay.
On that last point, the authors said it’s particularly important for teens to understand their vulnerability to scammers who are increasingly targeting a younger crowd. It starts with not sharing contact information, including your Social Security number, birth date and email address, with anyone you don’t know. And even then teens should be careful, the authors said.
As parents of two daughters, the Beachams also recognize kids will encounter plenty of awkward money moments growing up. That’s why they included sections in their book to help teens cope with the consequences of budgeting blunders, overdrawing checking accounts, exceeding credit card spending limits and other money issues that can cause immense embarrassment to an 18-year-old and immense problems later on if the lessons aren’t learned.