Finance Lessons For Your Teens

Mark Wendell |

By Mark Wendell

The current healthy economic environment has caused most everyone with children to reprioritize their spending and saving habits. Unanticipated additional household income may present an opportunity to instill the right financial habits in your teens that can carry them into adulthood. Just as our grandparents of the Great Depression era developed deeply ingrained attitudes about finances from their experiences of austerity, our teens can learn from these lessons especially now in a time of prosperity. The first step is to make your teen a partner with a stake in the family financial enterprise.

For most teens, it’s not about the money. Not yet anyway. It’s more about what the money can get them – entertainment, clothes, electronics, cars. Money, no matter its source, is simply the means for what is important at this very moment. This impulsive situation presents an opportunity to turn these teen expenditures into teen motivators for learning about budgeting, savings, investing, and smart financial management.

Teens have a stake in the family’s financial picture, so it is important to communicate to them the family’s goals especially as they relate to the teen’s impulsive desires. It doesn’t necessarily mean that what they have been enjoying will suddenly stop. They simply need to become more accountable for their expenditures and begin to gain a sense of satisfaction from smart financial management.  Having a participatory role in the family budget is an important step in their development.

  1. Have teens set their own goals and priorities? It’s a good time to start them with a financial journal for budgeting and record keeping. Perhaps an APP or a spreadsheet may work better for some teens. Get them to distinguish between needs and wants and then prioritize.
  2. Have teens develop a budget based on their priorities. Some teens are looking ahead to be able to buy a car, a pet or finance a trip. Their savings for future needs or wants should be a part of their budget. Both the expenditures and revenues should be negotiated to the point where everyone participates and understands the overall household picture.  
  3. Have teens establish a relationship with a bank and meet the bank manager. Have them set up ‘savings’ and ‘spending’ accounts, perhaps with a limit debt or credit card.  Have them contribute to a savings account or a college 529 plan. (
  4. Have teens experience saving with specific small home projects. If they understand that their wants will need to be financed from their savings, they will see the value in it. You can encourage their saving habits by applying a “match” to their savings, much like an employer match to a 401(k) plan.
  5. Show teens how they can become wealthy on their own. Teens have aspirations and dreams and, given the chance they will share them with you. Show your teens how they can become wealthy by the age of 40 by saving just $250 - $500 a month. Show them how inflation will impact this goal.

Teens are adults in training and, given the opportunity, they will demonstrate increasing amounts of responsibility and a penchant for smart financial management. Certainly they can be motivated by their own wants and needs, however, when they begin to see the vital role they play as part of the family financial picture, they may surprise you and exceed your expectations.