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Wealth Planning

Three ways you can help your teenager make the most of a new school year

It’s not too soon to plan. Start by helping your student articulate their goals for the year.

As a new school year approaches, your teenage children may already be focused on the academic and social opportunities ahead. Helping them articulate their goals for the year now, before summer ends, can help them get ready for a new set of challenges.

In this context, also talking with them about wealth and financial planning can help deepen your students’ understanding of your family values and beliefs, as well as provide important insights into how family resources and knowledge can support their personal growth and development.

These three tips, rooted in behavioral science, can help you get started.

1. Embrace the “fresh start effect” 

Like birthdays, anniversaries and other milestones on the calendar, the start of the school year provides a natural moment for you and your teenage student(s) to pause, reflect and set goals.

To take advantage of such moments, encourage your student to look back, envision the near future and plan for what’s ahead. It’s much like making New Year’s resolutions, but focused on opportunities in the academic year: New school or new subject matter? More independence? Greater financial freedom, such as a first credit card or investment account, or a larger allowance?

There are many ways for a student’s academic and social goals to intersect with family finances, depending on the age of your child. Building on those connections can help them see the steps they must take to achieve their goals, whether academic, social or financial. (Even if they appear to be more focused on peers or social media.)

Helpful tip: New tools at the right time

Will your teen need checking, savings and credit card accounts to successfully navigate the coming school year? If they don’t have them already, consider setting up one or more online accounts in their name.

Take advantage of the timing to talk with them about responsibly saving, spending and borrowing.

Your J.P. Morgan banking team can help you set up the accounts and introduce your student to the money management tools they will have at their disposal, including automated alerts and cybersecurity protections. Your team can also show you how to monitor your child’s transactions from your own digital devices.

2. Cultivate good habits

Students who rely solely on self-control to reach their academic—or financial—goals may ultimately find they fall short of the mark, especially in periods of high stress and attention depletion. That’s okay, and that’s normal.

It’s far easier to stick to a plan when an automatic system built on healthy habits is in place.

Encouraging your student to think carefully about their goals for the coming school year can be a powerful first step in achieving them.

We know they’re likely to be more successful (and less stressed) if they study a little bit every night for a Friday test instead of staying up all night on Thursday to cram. Similarly, if you’ve asked your teen to contribute to a planned ski trip over spring break, they’re more likely to have saved their share of the funds if they begin by Labor Day.

Start by explaining the reality: that without a clear savings plan, they are unlikely to put money aside each week to save for the ski trip. For example, they may forget or become distracted by other demands on their time and attention.

However, if they adjust their weekly spending and put in place automatic transfers of money to a vacation account, the desired outcome is much more likely.

This powerful learning experience can help make saving a lifelong habit—as well as translate into behavior that helps raise test scores and set career goals.

Helpful tip: The three-bucket strategy

Children of any age can learn how to manage they money they earn or are given by dividing it into three buckets:

  • One for money to spend on themselves now
  • A second in which to save for their future selves
  • And a third to give gifts or donations to others

In addition, showing your child that you use the same strategy to manage the family’s financial resources can help reinforce their behavior.

3. Consider opportunity costs

Time, money and effort are all precious—and finite—resources. When they’re invested in one thing, that necessarily means they won’t be available for another: A March ski trip precludes a March beach jaunt; taking a gap year before college means giving up first-year camaraderie with high school classmates; spending the weekly budget on concert tickets may wipe out dinner plans.  

It’s an important—and often difficult—lesson for everyone to learn (i.e., it’s simply not always possible to have it all). And there is much you can do to help your child absorb this fact of life.

Of course, your student is not yet at the stage where they must put aside spending to save for retirement or buy a home. But they do need to learn that if they spend their time, effort and money on one thing—whether it’s an impulsive choice or a deliberate one—those resources may not be there for something else. 

Helpful tip: Explain the tradeoff value

Opportunities to teach a child that tradeoffs are an inevitable fact of life come in many forms and should be seized whenever possible.

For example, when one client’s teenage son wanted to hang out with friends instead of joining a family “charity day,” his parents emphasized the value of making a tradeoff (i.e., a shared day of service was a unique and important opportunity for the family). As it turned out, the event sparked the son’s interest in group community service—something that he now organizes with the friends he wanted to hang out with in the first place.

As this client experience highlights, by patiently guiding your student’s decisions regarding how they spend their money, time and effort, it is possible to both reinforce your family’s values and help your child grow into a uniquely empowered individual of whom you can be proud. 

We can help

Your J.P. Morgan team can help you adapt wealth management strategies rooted in your family’s beliefs and principles to raise the next generation. Ask your team about how to hold a family meeting or for a copy of our guide, Teaching your children about wealth.



JPMorgan Chase & Co., its affiliates, and employees do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal and accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transaction.​

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