Personal finance for teens can empower your child

April 05, 2018

Teaching your teen about finances can be as simple as modeling responsible behavior while also allowing your teen spending money as a learning tool.

 

You want to teach your teenager about managing their personal finances responsibly, but your teen’s a teen. Lectures and lists are not always likely to work.

Instead, model a thoughtful approach to your finances. In other words, show your teen what you do rather than tell them how they should use their money. And then, within reason, let your teen make his or her own financial decisions. It can help him or her grow and learn.

Here are some basic ways to get started.

 

1. Lead by example

You can display financial aptitude and awareness in a number of ways:

  • Be transparent about your own monthly bills, debt and spending, especially if your teen asks. This portrays a realistic picture.
  • Create a family budget. It could be as simple as the money for weekly groceries or for meals out. Or, it could be an inclusive monthly budget. Either way, it can be eye-opening for teens to see how money is really allocated.
  • Use cash. With credit cards, it can appear that there’s a limitless well of resources. Instead, use cash for fun expenditures. It makes for a good visual representation of where money goes. When the cash is gone, the purchases for the day, week or vacation should wind down as well.
  • Compare prices when possible. Show teens that similar products can have wildly different costs, and encourage them to consider why one choice might be better than another.

 

2. Set financial goals for teens

Teens may not understand the importance of financial responsibility until they are allowed to manage and earn their own money and even develop financial goals, like saving for a special purchase.

  • For younger teens or preteens, a weekly allowance can make sense. It gives them a small amount of money to learn with.
  • For all teens, also consider paying for work beyond basic household chores that you would normally pay someone else to do. This can be anything from shoveling snow in the winter to helping build a deck in the summer.
  • For older teens, consider allowing them to have a part-time job. Not only will it teach them responsibility in a variety of ways, but they’ll now have their own finances.
     

While many families give a weekly allowance contingent upon the completion of household chores, there’s an ongoing debate about whether the practice is healthy.

Some experts feel it’s a bad idea to teach your children (especially pre-teens) that they’re doing chores for money rather than because they’re part of the family and live in the home. Some also feel financial goals for teens add too much stress to what can already be a difficult age. Ultimately, the decision is up to you.

 

3. Let teens spend (most of) their money

The point of allowing your teen some spending money is to give them a taste of what it’s like to budget and save — as well as what it’s like to run out of money. This only works if you let them make their own decisions.

  • Your teen’s money is not your money. You might not spend your hard-earned cash on candy bars and music downloads, but you need to allow them the freedom to learn for themselves.
  • If your teen runs out of money, don’t pick up the slack. A few nights spent at home because there’s no money for trips to the movies with friends is a non-emergency.
  • If your teen wants a big-ticket item (like a car, or an expensive video game console) for their birthday or a holiday, don’t automatically get it. Be honest and tell them it’s beyond what you spend on gifts. Offer to pay part of the cost, while encouraging them to save for the remainder.
  • Consider mandated savings. Talk to your teen about college. If, before they get a part-time job, you tell them it means you expect them to contribute part of their earnings toward a college savings plan, they’ll likely be amenable. Building the habit of saving a portion of every paycheck is healthy.
  • However, don’t move the goal posts. A part-time job doesn’t mean your teen’s suddenly on the hook for groceries and the electric bill. They’re still a minor and live with you. Let them earn and save their own money. (If your family has financial difficulties, talk to your teen — in this case, the part-time job has a different goal.)

 

4. Opening a bank account can make sense

Especially for teens with part-time jobs, a savings or checking account can teach added responsibility and long-term saving, as well as about interest rates and comparison shopping. It also gets your teen comfortable within a more formal financial setting.

 

Need help with setting up a savings or checking account for your teen? Make an appointment with a banker online and we’ll help you get started.

Related content

Closing on a house checklist for buyers

How to plan and save for adoption and in vitro fertility treatment costs

Multiple accounts can make it easier to follow a monthly budget

Is it time to get a shared bank account with your partner?

Don’t underestimate the importance of balancing your checking account

7 steps to keep your personal and business finances separate

Myths vs. facts about savings account interest rates

How to Adult: 5 ways to track your spending

Which is better: Combining bank accounts before marriage — or after?

5 tips for parents opening a bank account for kids

5 reasons why couples may have separate bank accounts

Checking and savings smarts: Make your accounts work harder for you

Dear Money Mentor: How do I pick a savings or checking account?

6 questions students should ask about checking accounts

30-day adulting challenge: Financial wellness tasks to complete in a month

Estate planning checklist: 8 steps to secure your legacy

Investment strategies by age

8 steps to choosing a health insurance plan

Key milestone ages as you near and start retirement

How to build a financial plan that covers your savings and expenses

How I did it: Bought a home without a 20 percent down payment

5 ways to maximize your garage sale profits 

How to manage your money: 7 tips to improve your finances

What is a home equity line of credit (HELOC) and what can it be used for?

Preparing for retirement: 8 steps to take

Estate planning documents: Living trusts vs. will vs. living will

Why estate planning is important

How a Health Savings Account (HSA) can benefit your retirement plan

Year-end financial checklist

Housing market trends and relocation impact

Finance or operating lease? Deciphering the legalese of equipment finance

Buying or leasing? Questions to ask before signing a contract

Insource or outsource? 10 considerations

The secret to successful service provider integration

Safeguarding the payment experience through contactless

COVID-19 safety recommendations: Are you ready to reopen?

Higher education and the cashless society: Latest trends

Unexpected cost savings may be hiding in your payment strategy

Protecting cash balances with sweep vehicles

Changes in credit reporting and what it means for homebuyers

High-cost housing and down payment options in relocation

What corporate treasurers need to know about Virtual Account Management

Crypto + Relo: Mobility industry impacts

For today's relocating home buyers, time and money are everything

How to sell your business without emotions getting in the way

5 steps to take before transitioning your business

10 tips on how to run a successful family business

Talent acquisition 101: Building a small business dream team

Make your business legit

How I did it: Turned my side hustle into a full-time job

Costs to consider when starting a business

How to test new business ideas

How to get started creating your business plan

How to establish your business credit score

The costs of hiring a new employee

How to expand your business: Does a new location make sense?

Common small business banking questions, answered

3 signs it’s time for your business to switch banks

Does your side business need a separate bank account?

How to build a content team

Multigenerational household financial planning strategies

LGBTQ+ financial planning tips

Do I need a financial advisor?

5 financial goals for the new year

How to track expenses

How to manage your finances when you're self-employed

Good debt vs. bad debt: Know the difference

Good money habits: 6 common money mistakes to avoid

Reviewing your beneficiaries: A 5-step guide

How to talk about money with your family

Financial steps to take after the death of a spouse

6 tips for trust fund distribution to beneficiaries

How to build wealth at any age

Retirement plan options for the self-employed

Retirement advice: How to retire happy

Retirement income planning: 4 steps to take

Retirement savings by age

Preparing for retirement: 8 steps to take

What is Medicare? Understanding your coverage options

7 things to know about long-term care insurance

Transitioning from the military to the civilian workforce

Achieving their dreams through a pre-apprenticeship construction program

Working after retirement: Factors to consider

4 steps to finding a charity to support

Year end tax planning tips

Should I itemize my taxes?

What types of agency accounts are available for investors?

Tips for navigating a medical hardship when you’re unable to work

11 essential things to do before baby comes

Webinar: Uncover the cost: Starting a family

Preparing for adoption and IVF

Checklist: 10 questions to ask your home inspector

Resources for managing financial matters after an unexpected death

What you need to know as the executor of an estate

What documents do you need after a loved one dies?

Checklist: financial recovery after a natural disaster

How does money influence your planning?

College budgeting: When to save and splurge

Webinar: 11 insider tips for student debt

Student checklist: Preparing for college

Uncover the cost of a college diploma

How to save money in college: easy ways to spend less

How to gain financial independence from your parents

The A to Z’s of college loan terms

Co-signing 101: Applying for a loan with co-borrower

Practical money skills and financial tips for college students

How to build credit as a student

5 things to know before accepting a first job offer

Learn to spot and protect yourself from common student scams

How I did it: Paid off student loans

Bank Notes: College cost comparison

Tips to earn that A+ in back-to-school savings

How to avoid student loan scams

Annual insurance review checklist

From LLC to S-corp: Choosing a small business entity

Recognize. React. Report. Don't fall victim to financial exploitation

Recognize. React. Report. Caregivers can help protect against financial exploitation

Webinar: U.S. Bank asks: Are you safe from fraud?

Is online banking safe?

8 tips and tricks for creating and remembering your PIN

Loud budgeting explained: Amplify your money talk

Pros and cons of a personal line credit

3 tips for saving money when moving to a new home

Is raising backyard chickens a good idea financially?

3 ways to keep costs down at the grocery store (and make meal planning fun)

5 tips for creating (and sticking to) a holiday budget

Should you buy now, pay later?

Financial checklist: Preparing for military deployment

5 things to consider when deciding to take an unplanned trip

Growing your savings by going on a ‘money hunt’

Working with an accountability partner can help you reach your goals

Why a mobile banking app is a ‘must have’ for your next vacation

How to decide when to shop local and when to shop online

Your 5-step guide to financial planning

Webinar: Common budget mistakes (and how to avoid them)

Does your savings plan match your lifestyle?

Uncover the cost: Wedding

Uncover the cost: International trip

Tips to overcome three common savings hurdles

Adulting 101: How to make a budget plan

Personal loans first-timer's guide: 7 questions to ask

3 awkward situations Zelle can help avoid

Allowance basics for parents and kids

Mindset Matters: How to practice mindful spending

How can I help my student manage money?

How to manage money in the military: A veteran weighs in

You can take these 18 budgeting tips straight to the bank

Save time and money with automatic bill pay

How to best handle unexpected expenses

Stay on budget — and on the go — with a mobile banking app

Do you and your fiancé have compatible financial goals?

U.S. Bank asks: Transitioning out of college life? What’s next?

U.S. Bank asks: Do you know your finances?

U.S. Bank asks: Do you know what an overdraft is?

Personal finance for teens can empower your child

It's possible: 7 tips for breaking the spending cycle

How to save for a wedding

Here’s how to create a budget for yourself

9 simple ways to save

Dear Money Mentor: How do I set and track financial goals?

Lost job finance tips: What to do when you lose your job

Money Moments: 3 smart financial strategies when caring for aging parents

Tips to raise financially healthy kids at every age

Money management guide to financial independence

First-timer’s guide to savings account alternatives

Money Moments: 8 dos and don’ts for saving money in your 30s

7 financial questions to consider when changing jobs

Travel for less: Smart (not cheap) ways to spend less on your next trip

What’s in your emergency fund?

Certificates of deposit: How they work to grow your money

What you need to know about renting

How to stop living paycheck to paycheck post-pay increase

Practical money tips we've learned from our dads

Understanding guardianship and power of attorney in banking

How to increase your savings

What financial advice would you give your younger self?

How grandparents can contribute to college funds instead of buying gifts

How to open and invest in a 529 plan

Using 529 plans for K-12 tuition

Your financial aid guide: What are your options?

Is a home equity loan for college the right choice for your student

Parent checklist: Preparing for college

How to apply for federal student aid through the FAFSA

What to consider before taking out a student loan

Consolidating debts: Pros and cons to keep in mind

How to use debt to build wealth

Know your debt-to-income ratio

Overcoming high interest rates: Getting your homeownership goals back on track

For today's homebuyers, time and money are everything

Crypto + Homebuying: Impacts on the real estate market

Should you buy a house that’s still under construction?

How I did it: Bought my dream home using equity

Buying a home Q&A: What made three homeowners fall in love with their new home

House Hacks: How buying an investment property worked as my first home

Managing the impacts of appraisal gaps in a hot housing market

How I did it: Built living spaces to support my family

Spring cleaning checklist for your home: 5 budget-boosting tasks

Saving for a down payment: Where should I keep my money?

Your guide to breaking the rental cycle

Checklist: 6 to-dos for after a move

What are conforming loan limits and why are they increasing

Military homeownership: Your guide to resources, financing and more

Uncover the cost: Building a home

The lowdown on 6 myths about buying a home

Home buying myths: Realities of owning a home

4 ways to free up your budget (and your life) with a smaller home

Get more home for your money with these tips

Money Moments: Tips for selling your home

Money Moments: How to finance a home addition

How I did it: My house remodel

Are professional movers worth the cost?

Dear Money Mentor: When should I refinance a mortgage?

Beyond the mortgage: Other costs for homeowners

Building a dream home that fits your life

10 ways to increase your home’s curb appeal

10 questions to ask when hiring a contractor

5 things to avoid that can devalue your home

What is an escrow account? Do I have one?

Is it the right time to refinance your mortgage?

What to know when buying a home with your significant other

These small home improvement projects offer big returns on investment

Should you get a home equity loan or a home equity line of credit?

Mortgage basics: How much house can you afford?

Mortgage basics: Finding the right home loan for you

Is a home equity line of credit (HELOC) right for you?

How to use your home equity to finance home improvements

How do I prequalify for a mortgage?

Home equity: Small ways to improve the value of your home

Can you take advantage of the dead equity in your home?

8 steps to take before you buy a home

6 questions to ask before buying a new home

10 uses for a home equity loan

Improving your credit score: Truth and myths revealed

Should you give your child a college credit card?

U.S. Bank asks: What do you know about credit?

Car shopping: Buying versus leasing your next vehicle

Take the stress out of buying your teen a car

Questions to ask before buying a car

What you should know about buying a car

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, Home Equity and Credit products are offered through U.S. Bank National Association. Deposit products are offered through U.S. Bank National Association. Member FDIC.