Six Tips for Teaching Teens Quality Money Management Skills

The teenage years are potent years for everyone and essential for the formation of healthy patterning of adult behaviors. Since we all live in a world in which money management skills make life better, how do you teach a rapidly growing teenager how to handle their financial life? Here are six tips for guiding your teen through the ins and outs of money management.

teen shaking piggie bankLearn About Banking

Introduce your child to the concept of money and banking by opening a checking account. Banks are a fact of adult life and working with banks is an essential money management skill that will come in handy later on in life. Parents and teens can work together to choose a bank and select the right checking account. Teens can learn about drawing on funds, check clearing dates, and how to use properly use a debit card. Remember if a child makes a misstep here that guidance is better than a bailout. If your teen has to experience a slight adjustment in their allowance to take care of a banking misstep it’s better to deal with it now than larger missteps later in life.


Begin imparting financial responsibility by helping set up a budget for your teen while they are still in high school. Show the how to calculate what their income is on a monthly basis, project spending needs and most importantly, learn how to save some money every month inside of the budget. Go over what the essential needs are. Discuss the difference between items they have to have and what they would like to have in the budget. Help set up reasonable savings goals. If you’re able to, offer them a reward for sticking to the budget.


Oftentimes the teen years are the first years with a credit card. Certainly there can be a learning curve associated with credit cards. If you feel like your teen is prepared to handle a card correctly then you and your teen can work together to select a credit card that is right for them. You can talk about interest rates, fees, grace periods, rewards programs, as well as late fees. There is a world of practical math to be explored and shared. To stress the point of guidance over bail out again if your teen makes a mistake here on a limited credit card and learns about credit card penalties, fees, or late payments then this is the time to do it. It’s better to make a couple of hundred dollar mistake here that they can learn to clear up than a multi thousand dollar mistake later.

Set Up a Savings Plan for a Short Term Goal

Maybe it’s a video game, a trip, or the down payment for a car. The important part here is teaching your teen about saving money and helping them develop quality savings patterns. This is a great place to use matching funds to incentivize savings with the reward of a purchase at the end of the line.

Debt Repayment

Chances are when adult hood dawns so does debt. The world of loans and credit is rite of adult passage today just as much as ancient rituals were in days gone by. Sit down on a regular basis and go through your teen’s credit card statement. Look at the interest rates and fees. Show you teen how to calculate what they are actually paying for that credit purchase versus what they would have paid in cash. Also, talk about credit scores and the importance of having good credit.

Identity Protection

Discuss how to protect your identity in the digital age such as how to keep passwords private as well as strategies for buying online. Although on this last point don’t be surprised if your teen knows more about hacking and how to stay private in the digital world. After all, they were raised in a world that is fully digital.

Lindsay Truman is a professional blogger that provides personal finance advice. She writes for PureChecks, a leading personal and business checks retailer.

  • Irving

    While my daughter in college has a good understanding of handling money, she wasn’t really clear or concerned about identity theft. This seems to be a common theme among a lot of college students. There are new identity theft programs available the most popular one being LifeLock. Thanks so much for your very informative post.

  • jelissa g

    Reallu good tips thanks

  • Sandy Cain

    OMG, I wish my mom had read this years ago! I STILL haven’t mastered money management skills!

  • Colleen Schindler

    These are great tips. My mom taught me these when I was a teen (all except Identity protection which wasn’t really an issue in the ’90’s). There are lots of teens who need to know this so they don’t crash and burn their credit when they hit 18, Thanks for the post.

    • Jenn

      I couldn’t agree more thank you so much for you comment!

  • http://[email protected] rebecca boster

    oh this is so important. If a kid can learn to handle money when they are young, they have a much better chance.

  • helga

    This is great info, the sooner they learn these skills the better!

  • http://[email protected] marissa lee

    thank you for the tips,my mom gave me and my brother the same tips..

  • Jennifer A.

    I like the idea of talking with your teen about identity protection. It’s not a topic I would have necessarily thought to discuss with my teenager, but in the digital age, it’s probably a good one to mention!

  • Cátia Neves

    Tha’s really good advise

  • md kennedy

    The best lesson my mother ever taught me was to save a portion of every penny I received, whether it was a gift or earnings. 5% was an easy target for me, so when I was able to put away more i felt so responsible!

  • Kathy Stuit

    What a great post! My daughter just turned 13 and is now getting an allowance. These are great tips I can teach her on saving money and not make the same mistakes I made at her age.

  • tiffany dover

    Love these. Had someone actually taken the time to teach me money management as a kid I’d probably be better with it today. I hate that I’m not.

  • Michelle F.

    great tips especially identity protection.

  • Anna Johnson

    My three are not teens yet, but this is something I’ve been wanting them to learn.

  • Cátia Neves

    That’s really good tipes