Teaching Teens about Money

In 2002 teens spent over 170 billion dollars - an increase of almost 40% in five years. Nearly 50% of today’s college students have four or more credit cards. I remember when my oldest child got her first job. She was barely 16 years old, but the credit card offers came pouring in! Although teens are controlling more and more money, studies have shown they have less and less financial understanding. How can we help our teens be more money smart?


University of Florida researchers recommend that parents introduce pre-teens between the ages of 9 and 12 to spending plans, savings and bank accounts. A teen’s income sources might include allowances, gift and/or employment. If you chose to give an allowance to your kids, determine the amount of an allowance they will receive based on how much her or she actually needs for school or other expenses, and how much the teen can spend as he or she chooses.

Encourage them to open a savings or checking account to begin managing their own money. Once teens have experience managing a checking account, they should be introduced to debit cards or pre-paid checking cards. They gradually become ready for credit cards. As a parent, we need to teach them to keep track of their purchases and to pay off balances each month.

Begin planning for the future with 16 to 18 years olds. Explain taxes and other with-holding that appear on their paychecks. Also, encourage them to open an investment account, placing whatever money they can into the account each pay period. By teaching financial dos and don’ts at an early age, researchers say we can reverse the trend of over-extended college students and personal bankruptcies later in life.