You'd happily line up a soccer coach to straighten out your kid's footwork, or hire a math tutor to shed some light on the darker corners of trigonometry. But what about hiring a money coach to get your kid on the right track financially?
Money coaches for teens and tweens may be a new idea, but it isn't outlandish. According to a 2011 Schwab survey, 75% of teens consider learning more about money management a top priority -- and 86% would like to figure it out before making credit-shredding mistakes in the real world. The solution just may be a kid and teen money coach, one of the handful of financial advisers, consultants and life coaches who'd be happy to teach your child about money basics like budgeting, credit and savings -- for a price.
How kid financial coaching works
The trend toward money coaches for children is so new that practitioners are mostly blazing their own trail. Most, however, are something like Gigi Collins, a financial planner and former banker in Short Hills, N.J., who, after 17 years of trying to teach lofty financial concepts to her two children, thought that "helping kids to grow up to be financially responsible adults might in some strange way be my way of giving back."
Collins and other financial coaches offer one-on-one sessions to children and teens, either in person or over the phone, usually pricing their services in the neighborhood of $60 to $150 an hour. Most also offer group classes and seminars to schools, churches and youth groups such as Girl Scouts.
That's how Brett S. Ellen, the founder and president of the American Financial Network, got started as a kid finance coach. As a financial planner, he'd always encouraged his clients to bring their children to one of their quarterly meetings. But after coaching his own five children through 85 different sports teams, Ellen thought a sideline of financial coaching for kids made sense. So far he's consulted one-on-one with teens, offered money management workshops at local schools, created instructional videos and blogged at KidsFinanceCoach.com.
While parents are receptive, they're also a little dumbfounded by the service. "I think most parents don't think about it," says Ellen. "I'm working with a fireman who's retiring next year. Even though he has five children, he hasn't ever said, 'I've got to get my kids involved with this now, because if I had understood more about money earlier in my life, I'd be so much better off.'"
That some financial coaches work with kids and teens is a message Charle Peck, an Ontario-based certified coach, speaker and high school teacher, is eager to get out. "My question is: How can we get more people out there doing what I'm doing?"
Covering the basics
Whether face to face, over the phone, in a group workshop or in front of a class, most youth money coaches tackle the fundamentals of personal finance: distinguishing between needs and wants, spending money wisely, understanding loans and credit, saving for the future, sharing with the needy and so on. To wrangle short adolescent attention spans, they use a combination of exercises, discussion and concrete examples. Peck, for instance, knows that teens have a hard time projecting a few months into the future, let alone 10 or 20 years, so she starts by asking what they want to do after high school graduation and helps them plan scenarios for how they'll get there.
Meanwhile, Patti Handy, a teen money coach in Valencia, Calif., and author of "How to Ditch Your Allowance and Be Richer Than Your Parents," puts overdraft and credit card late fees in perspective by having teens imagine working five hours at their part-time job -- for free. "I try to equate it to something they can relate to, and this example tends to hit home."
Where parents fit in
The kind of back-to-basics financial education teen coaches propose to give to your child has traditionally been parental territory -- and hey, your advice is free. So why pay for their services? "Kids will listen to a third party before they listen to their parents," says Handy, who's experienced it with her own 15-year-old son. "That's just human nature." You can tell your kid not to drop her whole paycheck at Hollister, but a financial coach might actually get her to listen.
In an ideal world, parents would be the last word about money for their kids, creating a litany of teachable moments from daily activities like supermarket shopping and getting cash out of an ATM. That, however, doesn't always happen. "A lot of times people say, 'I give my kids allowance, so I'm done.' But you really need to talk about money with them all the time," says teen financial coach Collins.
Luckily, there's no shame in asking for help, either because you're not entirely comfortable with money yourself or because your kid's behavior requires a pro intervention. For instance:
- Your teen's starting to earn a decent income at a part-time job but blows it all on clothes or video games.
- Your teen is regularly overdrafting a checking account or incurring late fees.
- Your kid treats mom and dad as an ATM and has no interest in earning any cash.
- Your teen is so materialistic that using the words "sharing" and "living frugally" draw a blank stare.
Connecting financially lost teens with extra guidance can prevent money headaches down the road. And a smart financial coach doesn't usurp your parental authority, but works with you to get your child the needed help. "Before a meeting, I always ask what parents' objectives are," says Ellen. "I want to be accountable for what parents want."
Finding your kid a coach
Right now only a handful of kid financial coaches are in business, so if you can't rustle one up in your area , consider asking an adult financial adviser or money coach if they're willing to meet with kids or see if your own financial professional will let your child sit in on your next session. Even a financially savvy family friend could be the neutral third party you need.
The ultimate goal for kid financial coaches is the same one most parents have: to help teens and tweens be self-reliant and make decisions that leave them financially stable and at peace. As Handy says, "I tell my son, 'The best thing I can do for you besides keep you safe and healthy is teach you how to stand on your own two feet.'"