Teaching Teens About Money

Teaching teens about money is so important! As a parent teaching teens about money can easily fall into the “forgotten” skills to teach along with cooking, cleaning and more. We think they just pick it up.

However today I am happy that Michelle is here as a guest to share her top tips on how to teach our teens about money. She shows the best tips on accomplishing this task with ease.

Teaching Teens about important life skills: Money.

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Teaching Teens About Money

As a parent, you want to raise a successful and independent future adult. One of the many important life skills a teenager needs to learn is money management. Teaching money management intentionally is crucial to your teen’s ability to be a successful adult.

It’s possible for an under-prepared person to succeed without any family education, but they will have to spend years learning it all on their own to get to a successful place. Teaching teens intentionally helps to prepare them for life outside your home. They will need to know how to budget, how to save, how to manage their impulses, and how to make wise financial decisions.

Even if you’ve never talked to your teen about money, you’ve been teaching them silently about how you manage your own money and what money means to you. My parents have never talked to me about money but I learned a lot just from watching them. Mostly, I learned what not to do, such as borrowing money from others and missing payments.

To avoid putting your teen through the same experience, use a few of the following techniques:

1. Talk To Them

Even if they appear not to be listening, they probably are. We all remember something our parents or guardians said during those years, so make sure to say what you want them to remember.

Educate them on the values you want them to have in life. Do you want them to work hard for their goals? Do you want them to be prepared for future problems? Whatever you want them to know and remember, make it known.

2. Variable Chore Cost

If your teen does not have a job outside the home, or if they are still doing chores for a monetary reward (allowance), consider giving each chore a specific cost instead of a fixed sum for completing all chores.

This serves two purposes:

  1. It teaches your teen that not all work is valued the same. This helps show your teen the difference in minimum wage work/cost and more advanced skill work/cost. This is not designed to make your teen think less of people work from minimum wage but rather to show then the different options for the future.
  2. This also teaches your teen what to expect in future jobs. If they pursue a less skill-oriented job they can expect a lower pay. If they pursue a more skill-oriented job they can expect a higher pay. This is not meant to discourage them from following their passions but to give them insight into how their decisions may play out.

3. Fixed Chore Cost

Alternately, you can give a lump sum for completing all chores to show your teen that all future professions require many different tasks be completed as the expectation.

4. Mandatory Family Costs

Every time your teen is paid, have them set aside 10% for a contribution to the family.

This can be handled in one of two ways:

  1. They still have access to this money and can decide how they wish to treat the family (order pizza, go out to dinner, take everyone to the movies, etc.). This helps to teach them self-confidence, pride, and a sense of accomplishment because they are able to provide something for their family.
  2. This can be given to the parents/guardians as a “rent” payment. This rent payment is to help prepare your teen for future reoccurring bills and help them to manage their money to ensure all bills are paid.

    (Note: This money should be set aside in a separate bank account and returned to the teen when they prepare to move out on their own.)

5. Money Management System

Because most people are visual or kinesthetic learners, using a jar or envelope system is most helpful in teaching teens about how to prioritize their money.

The purpose of this is to show them how to divide their money into important categories. Each family will have their own system of what is important.

The most common categories are:

  • spending
  • saving
  • emergency
  • family
  • tithing
  • gifts

Typically, four or fewer categories are ideal. The act of seeing and manually dividing their money helps them to develop a more lasting understanding and practice of these skills.

If your teen is an auditory learner, spend more time discussing the importance of this system and why you believe they should use it.

6. Loans

Sooner or later your teen will learn there is no such thing are free money, so it is best for you to be the one to teach them about this. If your teen needs a larger sum of money in the near future (such as wanting to purchase a car), you can agree to give them a loan and develop a payment plan prior to giving them the money.

Or you can talk to them about saving up their own money to make the purchase in full. This is a great time to educate them on making wise financial choices (such as saving more to buy a reliable car vs. buying the cheapest car they find).

Loans teach teens there is no free money.

Savings teach teens about delayed gratification.

Note: Budgeting 101: Teaching Kids to Manage a Budget is an easy way to teach your kids to manage a budget)


Help prepare your teen for adulthood by teaching them financial responsibility early on. Teach them the values of saving money, delayed gratification, routine costs, and future job expectations. Talk to them about your family values and how you want them to relate to money.

Teach them to be successful.

Thank you so much, Michelle, for sharing these great points on how to teach teens about money. 

Find Michelle here on her blog about personal finance and mental health

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Tips on how to teach your teen about money

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