8 Ways to Teach Your Teens How to Spend Wisely

teach teens to spend wisely

It’s never too early to teach your teens about spending money wisely. Teach them about money management early and they will be able to manage their money well when they grow older. Here are eight ways to teach your teenagers about spending money wisely.

Encourage your teen to create a budget plan.

Let your teenager write down all of their sources of income and all of their expenses, and explain to them how a budget works. Exclude the things that are normally paid for by a parent or an adult.

Having a budget or spending plan can help your teen learn how to manage their spending. It will also help him or her think of ways to earn money to cover their  expenses.

Teach your teen to track their expenses.

Show your teen how to track his or her expenses and keep the receipts of the items bought.

Writing down expenses and keeping the receipts can help give them a more visual understanding of how they are spending their money. It can also help them when it comes to deciding which items not to buy next time in order to save money.

Give out allowances on a monthly basis.

Make sure to tell your teen that this money is for the whole month and that it is their responsibility to make it last for the entire month.

A monthly allowance can help your teen budget their money, and it is important for them to make sure that it lasts until the next time they get an allowance. You will have to be firm about not giving out extra money should your teen spend all his or her money before the month is over.

However, also be mindful that your teen can make mistakes and you should be able to assess the situation and help your teen understand how they can do things better the next time.

Encourage your teen to find a part-time job.

Teens will think twice before spending money that they earned through their own hard work.

Talk to your kids about what kind of work they can do. Discuss the working hours—make sure that the part-time work won’t interfere with family time or school.

Talk about taxes and savings and encourage your teen to save a portion of his or her earnings first, before spending.

Help them open their own savings account.

Make sure your teen understands the terms of a savings account. Encourage your teen to deposit a portion of their money every week or every month. Don’t stop your teen from withdrawing money; it’s their account after all. Just make sure your teen is responsible for adding to his or her savings account.

Encourage your teen to write down their goals.

Having concrete and specific goals in mind can help your teen have more focus when it comes to managing their money. Your teen will be more motivated to spend wisely if he or she is saving for a new laptop computer or for college.

One way you can motivate your teen is to offer to match a certain percentage of whatever they save for a particular item.

Let’s say for every hundred dollars your teen saves, you’ll add twenty-five. It will encourage your teen to know that you are also committed to helping them with their goals. Make sure to commend them for being responsible—your approval will mean a lot.

Take your teen with you when you go shopping.

Take your teen with you when you go shopping for groceries or other basic necessities as Shannon did with her daughter a few weeks ago - Money Conversations: Shopping with Taylor.

Talk to them about comparing prices and checking for quality, value, warranty, and other factors.

Explain to them how you choose which brand to buy, how you plan for your meals and household activities, and how they translate to being efficient and cost-effective when it comes to buying things. Talk to them about using coupons and discount cards.

Helping them understand how spending smarter benefits your family can help them with their spending decisions.

Have regular discussions about financials.

Talk with your teenagers about how they’re doing with their savings and how close they are to achieving their goals. Brainstorm with your teens on what else they can do to reach their goals.

I think you should decide for yourself on how open you want to be when it comes to discussing your family’s financials. Perhaps you could start off slowly, see how that works, and then go into more detail as time goes on.

Make sure your teen understands that you are talking about family matters and agree on a level of confidentiality with your teens about such matters. The last thing you want is for all the kids in the playground to know how much money you and your husband make.

Simply talking with your teens about money and your current financial situation can help them be more aware and be more conscious about spending money.



    • DC @ Young Adult Money

      DC @ Young Adult Money 03/27/2013 5:14 a.m. #

      I think having your teenager get a part-time job is extremely important. I know that I learned a lot about money (and life) through working in high school. Having that income also allowed me to learn how to budget and save it.

      • Sicorra

        Sicorra 03/27/2013 4:45 p.m. #

        I agree! Teenagers should definitely have part-time jobs. I have a niece that is 18 and has never worked. Her family is not rich, but for some reason her mother discourages her when it comes to looking for a job instead of encouraging her and I think it is a real shame.

    • Thrifty Dad

      Thrifty Dad 03/27/2013 10:43 a.m. #

      Great tips! All important points. I agree with DC, a part-time job is really important. I know I learned so much and you're right I never would want to spend my own money. :) But once I had my first job, my parents stopped buying stuff for me, so I quickly had to learn how to save for the things I wanted. And when I started managing my own money, I felt really guilty about asking my parents for any money, because I then knew, how hard they had worked for it.

      • Sicorra

        Sicorra 03/27/2013 5:27 p.m. #

        It is definitely important. It is hard to spend $50 for example when you consider that it took you 5 or more hours to earn that money. Good for you for learning that at such an early age. Although I did save a lot of money as a teen, I never really put that practice to good use in my later years.

    • Shannon @ The Heavy Purse

      Shannon @ The Heavy Purse 03/27/2013 12:07 p.m. #

      Thanks for the mention and link to my post. Really appreciate it! You know this is a topic near and dear to my heart. All these tips are great. I think one of the greatest eye-openers for kids is managing a budget. It really gives them a far better perspective of how quickly even a large sum of money can be spent. They can also learn how good life can be living within their means too. Parents definitely need to openly talk to kids about money while at the same time making sure kids respect family privacy too. :)

      • Sicorra

        Sicorra 03/27/2013 4:47 p.m. #

        I really like the way you are teaching your girls budgeting skills by having them create budgets for their own parties and stuff. Again, it makes it all so realistic and as they work through it they instantly see the results of their work.

    • krantcents

      krantcents 03/27/2013 12:22 p.m. #

      All good points! Children learn much more from what the parents do versus what they say. It is the best way to support whatever ou teach your children.

      • Sicorra

        Sicorra 03/27/2013 4:48 p.m. #

        Yes, children are like sponges and absorb a lot more than adults think they do (both good and bad). It is so important to set good examples.

    • Corina Ramos

      Corina Ramos 03/27/2013 1:18 p.m. #

      Great advice Sicorra.

      I've got three teens at home and I'm going to give your suggestions a try. I always ask them about their goals but I've never thought about them writing it down, it's good to have that visual there to remind them.

      I also like the thought of them having their own savings account. :) Thanks for sharing this!

      • Sicorra

        Sicorra 03/27/2013 4:52 p.m. #

        I hope you are able to work on those items with them. I had my own bank account when I was 14 and it was great. But my family never talked about goals, nor did my husband's family, which is kinda sad. I encourage you to work with them on that.

        One thing I remember for when I was about 17 is that one day I wrote down 5 things I wanted to do, such as buy a car, get a better job, get my own apartment, and so on. Pretty simple stuff. Without thinking too much about it, those things just happened within the following 5 years.

    • Debt Roundup

      Debt Roundup 03/27/2013 1:56 p.m. #

      These are all great tips for teenagers. I plan on making my son get a job when he is old enough because it teaches them to be responsible. A very important trait that is slowly disappearing.

      • Sicorra

        Sicorra 03/27/2013 4:54 p.m. #

        You are so right Grayson! It does teach them responsibility. Learning those skills at home are one thing, but when they have a boss to deal with and potentially fellow employees, it is a whole different experience and a very important one, above and beyond how to deal with money.

    • AverageJoe

      AverageJoe 03/28/2013 9:18 a.m. #

      I try to have discussion about financial topics as often as possible with my 17 year olds. I even try to share the bills with them (not paying them, but that would be nice!). What's interesting is they really like it. They're eager to learn more about how money works. Yesterday we filed their taxes separately from ours for the first time. It was cool walking them through how a tax form works!

      • Sicorra

        Sicorra 03/28/2013 4:50 p.m. #

        I think that is so cool that you taught them how to do their own tax returns, even though doing them is no joy, but it is good skill to have.

    • Laurie @thefrugalfarmer

      Laurie @thefrugalfarmer 03/29/2013 5:22 a.m. #

      All very wise advice, Sicorra! I read a post somewhere once about a mom who actually let her teen run the family budget for a year (with her supervision, of course). Both mom and son said it was an amazing learning experience!

    • Alan@escapingmydebt

      Alan@escapingmydebt 04/06/2013 4:47 p.m. #

      Hi Sicorra,
      These are very good tips. Some of which seem to fall right out of my parents, "how to raise an independent child" guide, lol.

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