Timing is everything.

To understand why the teenage years are the best time to financially educate our children, it is crucial that we understand something of teenage brains and how they think.

Until recently, it was thought that the teen brain was similar to the adult brain, just newer. This apparently is far from the truth. In their seminal book, The Teenage Brain, authors Frances Jensen and Amy Ellis Nutt state that ‘teen brains are both more powerful and more vulnerable than at virtually any other time in their lives. Due to heightened brain neuroplasticity, they learn faster at this stage.’ They go on to explain that the knowledge becomes more entrenched the greater number of times information is repeated, which strengthens the neural connections.

That’s why it makes sense to teach teens about handling money smartly at this stage because the knowledge gets hardwired in them more quickly and effectively than in adults. With a little reinforcement, this critical knowledge gets cemented and their altered behavior now becomes instinctive.

It becomes an ‘unconscious competence’. They get so good at it they don’t even realize they are using that skill because it becomes second nature to them. They are instinctively more mindful about spending money because they are intentional about thinking about it. They are better equipped to prioritize their needs over their wants.

Indeed, they are better at distinguishing between the two and better trained to resist impulse buys. Delayed gratification and impulse control are the cornerstones of what it means to be financially educated. These abilities have ramifications beyond just the financial realm. They correlate to better academic performance, higher paying jobs, better health and more successful relationships.

Another reason to teach teens these skills is so that they can see beyond the façade of slick sales techniques and glossy, glamorous advertising messages. Teens are vulnerable to the power of suggestion. With unrestricted access to the internet and social media, they are inundated with suggestions at the touch of a smartphone. They aren’t trained to evaluate these suggestions or advertisements. Getting teens to then think critically about what they see and what is offered becomes imperative to their physical and mental wellbeing.

A key part of financial education is being taught how to critically evaluate advertising messages, to be able to question their veracity and develop a healthy skepticism about the claims they make. This particular training and skill development has far-reaching con- sequences in so many aspects of their lives.

Another key consideration with regard to teen brains is the fact that the human brain develops from back to front. This means that the prefrontal cortex isn’t fully functional until their early twenties. The prefrontal cortex is the area of the brain responsible for insight, risk assessment, judgement and planning. Little wonder then that our teens seem so lacking in these areas and a clarion call to why we still need to keep the guard rails up with regard to setting limits and restrictions with our teens.

In the book, Jensen goes on to say that while teen brains are ‘primed to learn, they are also exceedingly vulnerable to learning the wrong things. This means that a little bit of stimulation to a teenage brain, can lead to a craving for more stimulation that can, in certain situations, result in a kind of overlearning – commonly known as addiction.’ She says that teenagers get addicted to every substance faster than adults, and once addicted have much greater difficulty ridding themselves of the habit. This is worrying on all counts, especially with the startling rise of tobacco, drug and alcohol abuse among teenagers.

There might be one more addiction that’s far more insidious, mainly because it’s wrapped up in the cloak of respectability and professionalism. That is online trading platforms that lure unsuspecting teenagers. It’s easy to see the irresistible appeal these platforms have for teens:

  • They all leverage technology in innovative ways, which is always a hit with the present technophile generation.
  •  They offer a constant stream of dopamine hits with notifications and messages.
  • They offer beguiling promises of quick financial wins and ‘investor’ status.

This is aside from the user interface being attractive and frictionless – all the better to entrap teens with; the warnings and disclaimers being glossed over – all the better to confuse them with; and the ‘gamification’ of the platform – all the better to keep them addicted.

It’s key to remember here that behavioral addictions are just as dangerous as chemical addictions because they make use of the same brain circuits and so deserve just as much oversight. Depending on industry self- regulation here is akin to the fox guarding the chicken coop. It’s unreasonable and just plain unworkable due to conflicts of interest.

It’s up to us as parents and educators to step in to ensure our dangerously vulnerable teens don’t get ensnared.