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Teaching Teens the Value of Money

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Seven teens standing next to each other, in front of their blue lockers, smiling at the camera.

The teenage years are about independence, challenging the status quo, finding and developing passions and gaining a sense of self. How then, as the parent of a teen, is one supposed to ensure they are teaching their teen about money to prepare them for being out on their own?

Teens need hands-on experience with earning, spending and saving

The good news is that parents are not alone in this effort. Many states are launching educational requirements for personal finance classes for teenagers taught in school or through partner programs. But, at Till, we know that learning financial concepts in the classroom is not enough to teach teens the value of money or about budgeting. Teens need hands-on experience with earning, spending and saving to build a real money management skill set.

Earning

Teens usually have an interest in earning money. They often have activities or are hanging out with friends on their own and want to have money to make purchases — at their own discretion. You might say, they have an interest in spending money, but at this point in their development, they know that getting money comes from making some kind of effort: whether it’s having a job, completing tasks, or maybe even managing their own business endeavor (from making and selling slime to NFTs teens are very entrepreneurial!).

Two teenage girls working at the register in a supermarket

Spending

As we’ve said many times here at Till, kids are often told to save their money. But, in the real world, we can’t save our money all the time. We have to spend it, whether we like it or not. Spending is a super power that teens can develop over time, so that by the time they are out on their own, they are making smart spending decisions. This is a critical component to teaching teens financial responsibility.

Once a teen has an idea of their income, they can make informed decisions about what they want to spend on. Clothing? Video games? Pizza or Starbucks with friends? Concert tickets? These are all expenses that can be managed with a budget. Perhaps some of these things are bigger-ticket items that they will need to work towards over time. That’s where saving comes into play.

Four teens, two boys and two girls, biting into their hamburgers while taking a group selfie

Saving

When teaching teens money management, it’s helpful for them to establish goals. Having a mix of short- and long-term goals is helpful so that achieving them isn’t so far off. They may want to have a “rainy day” fund, or are saving for a trip, college or a car. Building flexibility into a budget to ensure that a teen can spend on smaller purchases while still saving toward a larger goal is important. In fact, it’s the decision-making process related to how much to spend vs. save that prepares us for real-life financial decision making.

Help your teen think through wants vs. needs, and how each of these is prioritized. Spending and saving should not be an all-or-nothing experience. It’s about finding the right balance that helps them achieve their goals.

Teaching teens financial responsibility doesn’t have to be as difficult or scary as it may appear. What’s key is having the right approach and tools to help you. Till is there with you at each step of the way!

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Banking services provided by Coastal Community Bank, Member FDIC. Till accounts are FDIC insured up to $250,000 per depositor through Coastal Community Bank, Member FDIC. The Till Visa Card is issued by Coastal Community Bank pursuant to license by Visa U.S.A. Inc. Apple®, App Store®, and iPhone® are registered trademarks of Apple Inc.