10 Ways to Make Your Teenager Financially Responsible

  • Purposeful lessons and thoughtful role modeling will instill lifelong financial skills in your teen.
  • Parents should aim to teach their teens the basics of income, savings, budgeting, and credit management.
  • You should also help your teens differentiate their wants and needs and enrich their financial knowledge through educational apps and websites.

Money management doesn’t come intuitively. You learn from first-hand experience by seeing what others are doing. The way parents talk about money and the choices it makes with money sends a powerful message to teenagers.

But watching parents make the right decisions is not enough. Teenagers want responsibility and want to be involved. By introducing purposeful discussions and expectations about money, your teen will become an adult with the experience and knowledge needed to protect finances and avoid costly mistakes.

10 Ways to Teach Teenagers to Financially Responsible Adults

Whether your teen manages money at work or has pocket money, good habits will help them make their own decisions. Here are 10 hands-on practices that can help you get started.

1. Make money

Before a teen can manage money, they must first earn it. You can start at home or at your first job. Consider paying your teens for the extra chores. Encourage them to do gardening or pet care for their neighbors. If they are old enough, guide them to a part-time job. From internships to camp counselors to babysitters to restaurant staff, there are a variety of jobs for teenagers.

Once you make money, have your teen divide the money into dedicated amounts for saving, giving, and spending. that much Consumer Financial Protection Agency (CFPB) recommends saving at least 10% of each paycheck and teaching teens about payroll deductions. Another option is 70-20-10 budgeting. Under this strategy, 70% goes to needs and needs, 20% to savings and 10% to donations.

2. Charitable Donations

Having money to share, being intentional and consistent is rewarding for teens and good for the community. It takes dedication and discipline to raise funds for a donation, especially when the budget is tight. The donation doesn’t have to be large or go to a large organization.

Putting a few bucks in a collection box that supports youth sports teams, refugees, the environment, or animal shelters is a good start. Motivate your teen by encouraging them to donate to an organization or cause they are passionate about.

3. bank account

Having a bank account allows teens to manage their money independently with parental guidance. This benefits both parents and children, explains Matt Gromada, head of youth, family and starter banking at Chase.

“First, it opens the door to important conversations and real-world scenarios on the fundamentals of finance, from spending and saving to explaining how interest and interest accrue,” says Gromada. “Secondly, it gives children independence and freedom, giving them real-world experiences and opportunities to learn.”

If your child is on a paycheck, direct deposit is a convenient option. Financial institutions must have federal insurance and provide online and mobile access so teens can check their balances over the phone.

4. Debit or prepaid card

When you have money in the bank, your teen needs a way to access it. Debit cards debit your account balance as you spend and can be used instead of credit cards at point of sale. It can be convenient, but overdrafting your account can result in fees and hefty fines.

Prepaid cards offer more protection, but less real learning. Parents determine the amount available and preload it on the card. Purchases in excess of the available balance will not be approved, but the Connected Parent & Teenager app allows parents to transfer money instantly when needed. It can be a reasonable solution for those who are not yet ready to use traditional debit cards.

When choosing between debit and prepaid cards, consider your child’s financial abilities and maturity, and the needs and needs of parents.

5. Save

Learning to save money will help your teen prepare for everything from special purchases to college, retirement, and emergencies. Build a budget with them and show the value of frugality. Prioritize needs over needs.

The CFPB recommends that teens “save 10% of their income and save at least three months’ worth of living expenses in case of an emergency.”

Create a budget and discuss with your child how much he or she can save. Ask them to think about what they have to give up and why they are worth it to reach their savings goal.

Modeling purchase restrictions also shows that teens are in control of their money and choices. In doing so, parenting expert and author Varda Meyers Epstein Kars4KidsWe advise against telling teenagers that they “have no money” to buy something they really want, like a new cell phone or other expensive items.

“This phrase means passivity and lack of control over finances,” says Epstein. “‘It makes more sense to say, ‘I prefer not to buy that phone because I want to use that money to fund your college’ or ‘I don’t want to spend money on a phone right now’. If there is, we can consider it.’ The point is to show that you are in control and that you have choices and ways to use what you have wisely.”

6. University Tuition Fees

College tuition can be one of your teen’s most essential financial goals. Having a real conversation about the costs, how much you can contribute as a family, and the expenses your family has to bear on their own will help you understand your financial burden. They will benefit from saving early, planning, and seeking grants and scholarships. The less debt you have after graduating from school, the better.

that much college cost calculator Information from the College Savings Plan Network, which advocates a tax-free state savings plan known as 529, can help you understand what to expect.

“As long as you do it long enough, you’re going to see really good returns,” said Jordan Lee, founder of The. sponsor, an investment platform that makes it easy for friends and family to donate to their child’s college account. “You never have to pay

capital gains tax

When you actually use the money, or as the fund grows over time.”

Lee also says that it’s never too late to start 529 when the student is a teenager. “If it takes four to seven years to create and invest in a college account with the help of family and friends, you should be earning enough money to cover tuition or boarding fees for a semester or a year, depending on the school you choose.” say

7. Understanding compound interest

Compound interest can be a financial amplifier or an enemy that erodes wealth. Teach your teens how it works with practical examples so they can understand its power.


It is a great financial ally when increasing your investment.

“If an 18-year-old invests only $37 a month and earns a 12% annual return, by the age of 65 it will be over a million dollars!” Matthew Robbs, founder of the website, says: smart savings advice. “If they wait 10 years until they turn 28 and invest $37 with the same return, they will only have $300,000 at 65.”

However, stacking up credit cards and other high-interest debt can have the same principles against them.

“I teach young people this is important.

asset management

In fact, it will allow them to save and invest for the future instead of wasting years trying to pay off their credit card debt for their stupid decisions,” says Robb.

Want to see how fast your money will grow? Experiment with your teens with different donation amounts and interest rates using Personal Finance Insider’s compound interest calculator.

Balance after 5 years

initial investment


total contribution


8. Credit Card

Teenagers need to understand how credit cards work, even if they don’t accept them until college or later.

“Know and practice.

good credit

As credit affects your future lifestyle, ability to buy a car, and employment opportunities, card habits such as spending within your assets and paying your balance in full on time can help pave the way for major purchases and life moments. There is,” says Mary Hines, said Droesch, Head of Consumer and Small Business Product at Bank of America.

Securing a credit card and adding your teens as authorized users to your account can be a way to help them build credit with low risk.

9. Credit Score

Prepare your child for the highest possible credit score by teaching how credit scores are calculated and why they matter.

All in all, paying your bills in full on time and avoiding large loans will give you more options and lower interest rates when looking for a loan or credit card. Your credit score may also affect the rates offered for insurance and some job opportunities.

Talk to your teen about lines of credit and credit utilization, and make sure they understand that buying on credit uses borrowed money.

10. Money Management & Savings App

Modern teenagers are growing up in a digital world that is vastly different from their parents and grandparents. Why don’t we meet there? Online tools and apps make learning finance easy and fun. For example, the Acorns and Wealthsimple platforms encourage saving and investing extra change. Simplifi by Quicken lets you set goals, track expenses and create budgets. The company provides a one-stop app to help you save time and manage your finances.

Julien Brault, CEO of financial management apps, said, “Teenagers use their mobile phones a lot. hard bacon. “Isn’t that why? Instead, using the apps and tools available on your phone will help you better manage your own finances.”

Financial institutions also have tools to help teens get the most out of their money. for example, Chase autosave You can either make a deposit or set a savings goal and fund it according to your chosen schedule. green lightGiving families prepaid debit cards and providing strong support, there is content dedicated to improving your child’s financial literacy.

Help your teens build a secure financial future.

You don’t have to be a money expert to help your teenage child on their financial journey. You can get help with our educational content. Jump$Tart Coalition and the Federal Deposit Insurance Corporation. money smart A curriculum that offers games and online classes for specific age groups, including teens.

Talk openly with your children about finances and set an example for them to follow. Include it in your budget. Ask them to help you pay for the item you want. Follow sound principles. Through Mymoney.gov, the Congress-approved Financial Literacy and Education Commission, provides advice on making, saving, protecting, spending, and borrowing money. Show in your day-to-day decisions that you have control over where your money goes and what it’s spent on.

“As in all other areas of life, children will inherit financial habits from their parents,” said Tanya Peterson, brand vice president. free financial network. “When parents argue about money or spend it out of fashion, kids will know right away. Teenagers, on the other hand, can see how their parents can live on their own money (even buying individual drinks rather than refilling a water bottle). buying or cooking more meals at home), that’s what they’ll learn.”

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