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Struggling to help your teenager understand the value of money? I was too until an accidental lesson taught my daughter a valuable lesson about personal finance, opportunity costs and saving money.Opportunity Cost:  The Best Teenage Lessons are Learned From Snakes

We got a new pet recently.  Snakey didn’t last long enough to even get a name.  It takes more than 24 hours of ownership to get a name around our house.

Abby has wanted a snake for years.  I’m not a pet person, but I do kind of like snakes, so after some discussion about responsible pet ownership, Aaron and I gave her the green light.

We told her the snake would be 100% her responsibility financially.   She would be required to keep the cage clean and do all of the maintenance.

Saturday evening Aaron and I were hanging out at home (because we are boring) and Abby walked in with her new prized possession.  She was ecstatic about her new pet and we all spent the next couple of hours playing with Snakey.

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The next morning, I was woken up (very early) by the following text from Abby. “I’m already scared of my snake.  I want to take her back, she tried to bite me.”

I tried to be encouraging and reminded her that it was probably scared and needed time to adjust. I was pretty proud of myself for being so supportive – because even though I said yes, it is still a snake in my home.

Shortly afterward I got this text.

“I have come to the conclusion that I really love snakes and holding snakes, but I’m too much of a baby to own one and that the 200 dollars I spend on buying a snake could have been 400 towards a car.  I’m sad to take her back, but I think it’s the best decision

At that moment I knew that the financial lessons we had been teaching were finally starting to sink in.

As always there is a bit of a backstory.

We are lucky enough to have three vehicles, so when Abby turned 16 she was able to use one of our vehicles if her grades and lifestyle matched our expectation.  She isn’t perfect, but overall she has earned pretty much-unlimited access for the last year.

Although we don’t mind her using the car, we know that at some point she will need her own vehicle.  We told our kids that we would match whatever they saved to purchase a car.

Over the last two years, Abby has done a great job putting money away and with our matching program will be able to afford a decent car prior to moving out.

***Editorial note – A few years after this incident she accidentally blew up the car which led to a post on 5 tips for purchasing a used car. ***

What made my day is that she is finally starting to understand the concept of “opportunity cost.”  Opportunity cost is a fancy accounting term that refers to the benefit that could have been gained by using the same resources for another purpose.

In Abby’s case, the snake was a $200 purchase that was fun in the moment and seemed like a great idea.  What teenager doesn’t want their own snake?

Once she had a little bit of time to consider the ramification of her purchase she very quickly began to have buyer’s remorse.  Once buyer’s remorse set in all she could think about was her future car.

And finally, the concept of opportunity cost sunk in.

I’ve been trying to teach the lesson for years, but obviously my use of spreadsheets and logic just didn’t work.

It took a near bite from her pet and dreams of a car to finally make sense.

Unfortunately, I’ve discovered over the years that no amount of lecturing really works with my teenagers.  At one point I paid them $100 to read This Book and write me a report.

I got some spectacular reports back with pages and pages of handwritten notes.  They read and understood the importance of financial management, but even though they got it in the moment, they weren’t making lasting change.

It was so frustrating to me, to feel like my lessons were sinking in and then not see the results I expected. 

This incidence finally made me realize that all I could do to teach my teenagers about money was to just keep talking to them.  I take every opportunity to speak with them about finances.  I share personal experiences and point out new stories that will affect them.

99.9% of what I say gets ignore, but they are listening in the back of their minds.  Eventually, something will click and they will suddenly start to see the big picture.  Just keep trying!!!

So from here on out when your teenager wants a snake, make sure you get a biter and maybe you’ll get lucky and they’ll learn the opportunity cost lesson.