Raising Financially Confident Teens
Raising Financially Confident Teens
Raising teenagers is never easy. They are experiencing many changes that are happening simultaneously, most centered on their desire for more independence. At the same time, the teenage years can be challenging for parents. One area where you can have a lasting impact is teaching your child how to manage money responsibly.
The desire to become more independent escalates quickly once your teenager begins to earn (and spend) their own money. Whether starting their first part-time job or earning money through babysitting or other tasks, parents can use these opportunities to teach valuable life lessons about money management.
Here are six ways parents can help their teens become more money-savvy and boost their money-management confidence.
Learning the Value of a Dollar
One of the most basic and essential lessons a teen can learn is the value of a dollar. When your teenager begins to earn money through a part-time job, babysitting, mowing lawns, or chores at home, they start to understand that hard work leads to rewards.
A helpful way to influence your teen to make wiser spending decisions is to have them break down purchases into hours worked. For example, if they want to buy a new outfit that costs $60 – how many hours will they have to work or babysit to pay for it? How many lawns do they need to mow?
Make Budgeting a Personal Habit
Budgeting doesn’t have to be boring spreadsheets filled with numbers. The art of budgeting comes down to knowing how much money you earn, making wise spending decisions, and planning for the future.
Once your teen begins to earn money regularly, sit down and review the concept of budgeting. Begin by having them list all their monthly income, planned expenses, and savings goals. Then, let them work out how to manage their money best. For some, it might be boring spreadsheets; others might prefer a notebook, budgeting app, or stuffing envelopes.
Remember, the goal is to get them thinking about their money and how those funds can help them obtain what they want now and in the future.
Save for Something That Matters
Simply telling your teenager to save a portion of their money isn’t necessarily the most effective strategy. Teenagers’ lives are filled with short-lived fads, keeping up with social media influencers, and avoiding FOMO. Breaking through to your child is easier if you help them find their “why.”
Why do they have to put money aside in savings? Why can’t they spend their money as they please – after all, it’s their money! Help them discover something they want. It might be new clothes, going to a concert with their friends, or, for more ambitious kids, saving for their first car.
Once they determine “why” they are saving money, you can help them create a consistent savings plan to reach their goal – and they’ll be more motivated to stick to it.
Set Goals for Motivation
Achieving goals often involves three things: patience, discipline, and planning. While it might seem straightforward, patience is probably the hardest part!
Delayed gratification is one of the most challenging characteristics to learn, even for adults who regularly use credit cards to buy what they want now. However, teaching these skills will have a lasting effect on their ability to bypass future credit card challenges and better manage their money.
Using their savings “why” from earlier helps them break down their goal into mini milestones. For example, if they plan to save $200 in four months, they could aim to put aside $50 monthly – or $12.50 each week. Their motivation and confidence will grow as they progress toward their goal.
Talk About Credit Before It’s Needed
While loans and credit cards may not be relevant to them now, it’s essential to introduce teens to these concepts so they’re prepared to make those decisions later in life. Many young people build mindsets that all loans are bad. But that isn’t true. Most people need loans to buy cars and a home and help with unforeseen expenses.
Explain to your teenager what a credit score is, why paying bills and loans on time is essential, and how loans work. Show them how credit cards can help cover emergency expenses and assist with cash flow until your next paycheck arrives – but make sure you discuss making a plan for repayment.
Consider adding them as authorized users on your credit card when they turn 18. Allow them to make small purchases that they must repay you with cash. Simple credit lessons today can prevent costly mistakes in the future. Plus, this will help them build their credit early and responsibly.
Turn Mistakes into Teachable Moments
Everyone makes financial mistakes. It could be overlooking a bill, being late on a loan payment, or overdrawing your checking account. It’s better for your child to make minor errors now, while they’re under your wing and can be helped.
As your teen learns about money, give them more freedom to make financial decisions. Doing so opens the door to possible mess-ups. Avoid punishment for money mistakes – instead, turn these mistakes into real-life teachable moments.
The lessons that last are those we tend to learn the hard way. While you don’t want to let your child make a significant error, what they learn in the process can have a lasting impact.
Raising teenagers isn’t always easy, but teaching them about money management can be! Everyday shopping and grocery store trips are perfect opportunities to begin having real financial conversations. Take it slowly, make lessons practical and applicable, and they will start to develop the financial know-how they need to succeed in their adult lives.
CAMPUS Can Help!
At CAMPUS USA Credit Union, we make it easy to introduce your child to responsible money management. With our Rising Star Teen Checking Account, accountholders as young as 10 years old can receive their own debit card, giving them hands-on experience with spending wisely and managing their own money.
Our team is here to walk them through every step—from opening their account and making their first deposit at the teller line to learning how to navigate CAMPUS Online and Mobile Banking. Stop by any of our convenient Service Center locations, call 800-367-6440, or schedule an appointment online.
By CAMPUS USA at 29 Apr 2025, 08:00 AM