Raising teenagers brings a rollercoaster of emotions. One minute, your son or daughter thinks you’re a genius and fun to be around and the next, you don’t know anything and they “can’t wait to leave home!” 

Hormones, life changes, big decisions, heartbreaks, and rebellion are just a few of the many challenges you have to help your teenager overcome. 

Add learning life skills such as money management and financial literacy to that list and you’ve got a lot of work on your plate! 

Thankfully, there are many resources for raising successful, intelligent, happy children. And while we won’t get into the teenage angst I’m sure many of you are familiar with, we do want to give you some tools to equip you with so you can teach your teens important money lessons. 

3 Important Money Lessons to Talk About With Your Kids or Grandkids

Financial literacy for teenagers doesn’t have to be dry and boring, nor does it have to be one more thing you lecture on. Instead, try having some fun with it! Engage your child and make progress your goal, not perfection.

Start with these three money lessons when teaching money management to your teenagers: 

  1. The art of paying yourself first. 
  2. The skill of effective budgeting.
  3. The ability to utilize debt responsibly. 

If your teenager can get a grasp on these three personal finance skills, they will have a great head start on their financial journey. 

1. The Art of Paying Yourself First

From your teenager’s very first paycheck, they should learn the art of paying themselves first. Put simply, this means that a portion of their earnings should be saved (and/or invested) for their future selves. 

It can be tempting to put this off until they earn more money. But learning this discipline will teach them to consistently save and spend less than what they earn. Even if they save just 10% of their earnings, this essential skill can still be developed. 

Saving a percentage—rather than a specific dollar amount—of their earnings is wise because as their income grows, their savings amount will automatically increase. 

Tips for Instilling the Habit of Saving

As a teenager, your child probably hasn’t had to pay for too many things quite yet, which makes it difficult to conceptualize the need for saving. Try these tips to help them develop this essential skill:

  • Encourage your child to create a savings goal. Teenagers probably don’t have to look far to find something they’d like to save for—sports equipment, a concert, college tuition, or even their first car. Help them determine how much money they need to save and how long it will take given their income. 


  • Help them open a savings account. Banking is an essential part of managing money well. Help your child open a checking and savings account so they have a safe place to store their earnings. Choosing an account with a generous interest rate is a bonus! Setting up automatic savings can also be a great way to ensure they’re hitting their savings goals. 

  • Sweeten the deal with additional money. If you see your teenager making wise decisions with their money, you can strike a deal with them and add a small percentage (1% or 2%) to their savings each month. This can boost their savings and feelings of accomplishment. 

  • Make it visual. It can be hard to stay motivated when your money is tucked away in a bank account. Encourage your teenager to create a vision board or download a savings app on their phone that will provide a visual representation of their savings goal and progress. 

2. The Skill of Effective Budgeting

Love it or hate it, budgeting is an essential skill for effective money management. Helping your teenager learn the difference between needs and wants, how to spend consciously, and controlling their impulses takes time and patience. 

Tips for Instilling the Habit of Budgeting

Keep budgeting fun and interesting by showing your teenager that planning and delayed gratification can ultimately help them acquire what they truly want. Try these tips when teaching your teenager the skills of budgeting: 

  • Determine their average monthly income. Teenagers most likely have inconsistent income, so this can be a bit challenging, but take the income they’ve earned over the last few months and find their average so they can see what they’re working with. 

  • Start with the essentials. The first line item should be paying themselves (i.e. savings). After that, write down anything they’re responsible for paying each month— their cell phone bill, a monthly activity fee for a hobby they enjoy, or their car insurance. 

  • Enjoy the fun categories. After saving and paying for their essentials, your teenager can enjoy the rest of their earnings! They can break these down into smaller categories such as clothing, recreation, or saving for a fun trip or experience. 

3. The Ability to Utilize Debt Responsibly

It’s never too early to start teaching your teenager about debt utilization. Used wisely, debt can help them secure a home or start a business when they’re adults. But if used irresponsibly, it can keep them in an underwater cycle of crippling debt. 

While keeping things fairly straightforward, educate your teenager on the importance of their credit scores, good debt versus bad debt, and what interest really means (paying a lot more for things).

Tips for Teaching Responsible Debt Utilization

  • Get them a debit card. A debit card is a great way to practice using a card (versus cash) without the temptation to overspend. 

  • Add them as an authorized user. Your teenager might not be ready for their own credit card, but they can still build their credit through your responsibility and diligence. Add your teenager as an authorized user and discuss the parameters of using the card. 

  • Simulate debt usage. Teach your teenager about loans (a mortgage for example) and explain the details of the total loan amount, interest rate, payment schedule, and late fees. When they see how much interest goes to the bank and out of their pocket, it may help them understand the importance of paying cash for items (outside of a mortgage). 

  • Discuss credit scores. As a teenager, a credit score can be an abstract idea. Keep it simple and explain that it’s an important number that reflects how well they handle debt. 

Learn More Personal Finance Tips with Five Pine Wealth

At Five Pine Wealth Management, we love helping families thrive in their financial lives through comprehensive financial planning and investment advice. Our goal is to help you effectively manage your finances so that you can spend more time with the people you love and on the things you enjoy. 

For more personal finance lessons and tips, sign up for our newsletter! We look forward to connecting with you! And for more information about our services, email us at info@fivepinewealth.com.