7 Essential Money Management Lessons for Teenagers

by Samantha Green
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By the time kids become teenagers, they already have a good grasp of what money is and what it is for — like how it is used to pay bills and buy goods. At 13 years old, most children already understand fundamental money management concepts such as the importance of saving money and giving to worthy causes or those in need. Most high schoolers these days hold part-time jobs and even begin to find interest in investment tips for teens to grow their money.

However, as adults, we know that our children have a long way to go in their financial education. The stakes become higher as they get older and start making their own spending decisions, and it is up to the parents to ensure that they receive proper guidance and develop habits that will help them become financially responsible adults.

The sooner your teens learn and understand these essential money lessons, the brighter their financial future will be.

money management lessons for teens

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1. Earning Money

People who realize the relationship between hard work and money from an early age tend to develop a good financial mindset.

Instead of giving your kids more money when they ask for it, have them take up extra chores around the house for extra allowance. If you have children in their later teens, encourage them to find a side hustle or a part-time job, so they learn how money works in the real world. A part-time job can also help your child build life skills, experience, and confidence that will benefit them in the future.


2. Creating a Budget

Teaching teenagers how to budget is the first step to instilling good spending habits in them. Ask them to make a list of their expenses (both needs and wants) and allocate a portion of their allowance and or income toward a particular expense. If they don’t have enough to cover everything, they’ll have to adjust their expenses or take up a side hustle to earn more money.

Creating a budget will not only allow your kids to see where their money goes but also help them make smart spending choices, especially if they have money goals that they wish to achieve.


3. Saving Regularly

The teenage years are the best time for your children to learn the many benefits of saving money and financial goal-setting.

Teach your teens to allocate a set portion of their allowance or paycheck towards their savings regardless of how much (or how little) money they receive. Learning the importance of saving from an early age will help them develop solid financial management habits that will surely benefit them when they’re older and earning more money.


4. Needs vs Wants

Needs and wants are two different things, but teenagers may find it hard to distinguish one from the other (a lot of adults still do!).

Teaching your kids to wait at least 24 hours before buying something they saw in the store or online is an effective way to help them discern between a necessary and impulsive purchase. This is also a great mindset to maintain no matter how old or where you are in life.


5. Banking Dynamics

As the world transitions to cashless transactions, it becomes even more important for children to understand how financial institutions (like banks and credit unions) and the products they offer work.

Having their own savings or checking account is one of the best ways to teach teenagers how to manage their own money. Allowing them access to a debit card for teens will also provide them real-world education on how the cashless system works.


6. Credit Cards and Debt

Credit cards are the most widely used form of payment these days, which is why it’s critical for your teens to understand what it is, how it works, and the risks associated with credit card transactions.

Before your child gets access to their first credit card, make sure they are fully aware that it’s not free money. And while the responsible use of credit cards can help them raise their creditworthiness, they should always be wary of getting into debt.


7. Investing and Compounding Interest

Once your teenager has plenty of money saved, it’s to talk to them about investing and the power of compounding interest. The longer their money is invested, the more it will grow over time.

Go over the basics of investing with your teens and help them open an investment account. You’ll want them to start investing with future goals in mind and using the “set and forget” strategy.

Building wealth through compounding takes time. Thus, time is the most important factor in this process. The earlier you introduce your child to investing, the better the long-term pay-off will be.




  • Samantha Green

    Samantha Green is the Content Marketing Strategist for the MCA award-winning app, BusyKid, the first and only chore and allowance platform where kids can earn, save, share, spend, and invest their allowance. A mom of two, she enjoys spending time with her kids and reading books to them.

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