Money and Teenagers: How to Help Them Manage It

How to help teenagers manage their money?

When we talk about parental responsibilities, rarely does financial literacy come into the conversation. 

Teaching your kids, especially teenagers, about proper money management skills should always be a priority. We don’t want them to struggle with their finances once they reach adulthood, do we? Nor do we want them to be financially dependent on us forever. But where do you begin with such a daunting task?

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Start with Tracking

If you were to misplace one of your belongings – your smartphone, for example – what would be the first thing you do? You would track it, wouldn’t you? You’d try to recall when was the last time you saw it and search from there. The same goes for money. If you realized that you’re running out of money faster than usual, you need to track back where and how you spend them. Only then you’d be able to successfully manage your finances. 

Use this analogy with your children to make them understand the importance of tracking their cash. Teach them to jot down each and every purchase they make, or make a habit of keeping their receipts instead of immediately throwing them into the nearest trash bin. Or, even easier, get them to download apps that allows them to list down all the money they spend.

By developing this habit, they’d start understanding how expensive things can be and how valuable money actually is. This will then encourage your teenager to rethink their money spending habits and start saving.

Save, Save & Save!

When you breach the topic of saving to your teenager, try to link it to something they like.  

No teenager likes being told to do something if they don’t see the point behind it. So, it’s your responsibility to make it appealing to them. Suggest to them to save up for an upcoming concert of their favorite band, perhaps? Or a car they’ve been begging to drive once they get their license. Whatever it is, give them a financial goal to kick start their saving habits.

Once they have a goal in mind, then you can help figure out the amount and frequency with which they should put it away to hit their target. Sit down and discuss what’s a realistic amount for them and how will they obtain enough money to start saving it away. Will they work part-time at either the mall or will they volunteer to do a side gig like tutoring the other kids at school? Do they want to set aside some of their monthly allowances you and your partner provide for them?

Once that’s settled, then they can figure out how they want to save up their money. Putting it in a savings jar will be a great reminder of their goals, while opening a bank account ensures maximum security. 

Introduce Them to Budget

Are you familiar with this tactic that parents do when their kids ask for something, to which the parent will tell them, “Sure, but make sure it’s not more than $20”? In that scenario, the parent had established a budget for the kids to follow and they did. 

You can use the same concept by introducing to your teenager a monthly budget they could follow. Give them a set allowance that covers food, transportation and clothing, and emphasize that you won’t be giving them anything more unless for a special occasion – like a school trip fee. Before you set their monthly budget, though, do have an in depth discussion to understand your teenager’s needs and priorities so that everything is just and fair on everyone’s end.

Help them calculate and divide the money into the necessities first, such as food and transportation, and explain to them that the remaining money can be used for whatever they wish to spend on. This way, they will learn to responsibly manage their money since they understand the consequences of irresponsible money splurging.

Needs, Wants, and Wishes

Teenagers at that age want pretty much everything and anything. They’re impressionable, so that means whatever they see their friends and peers are into at the moment, they would definitely want a taste of it too. So, they start asking.

“Mom, can I get a new bag from XYZ? My friend just got one and it’s so cute!”


“Dad, there’s a new MMORPG coming out next week, can I please have it?”

It’s not a fun conversation mostly because you’re going to reject their request once you see the price tag and then they’d start sulking about the “unfairness of the world”. Don’t worry, they’d get over it but it’s the same cycle that repeats every other week. So, how do you put a stop to this?

Talk to your teenager about their needs, wants, and wishes. Help them prioritize the importance stuff so that they can differentiate it from their simple wants and wishes. Make it crystal clear that if they very desperately need that one thing, then they should work hard for it. By teaching teenagers that the true value of life aren’t from objects but experience and the people we’re surrounded with, they’d learn not to spend carelessly on objects that won’t last.

Be Their Financial Role Model

Are you familiar with the old Malay saying, “ibarat ketam mengajar anaknya berjalan lurus?” If you were to translate it in English, the phrase would be, “like a crab teaching its child to walk straight.” Essentially, it describes a scenario in which an incompetent person teaching another about something. It’s a futile attempt because both sides never learn a thing from each other.

This also applies when we want to teach our teenagers about money. Children are very observant and they learn a lot from watching your behavior. If you’re good with your money, chances are, your kids will be good with them too. But if you happen to be lacking in that area? Then this practice will be a lesson for both you and your teenager.

If you want your teenager to follow a budget, you need to follow a budget as well. Show them your progress so that they’d be motivated to do the same. Want them to start investing as early as possible? Talk to them about the basics of investment and guide them to get started. Teach them to be smart spenders by asking them to accompany you during grocery shopping where you can show them how to do a cost comparison, read product research and check consumer reports. 

Want them to start saving? Try making a habit of putting $1 into the piggy bank in the living room everyday. You can also teach them to be generous with money by encouraging them to donate to causes that they’re passionate about. Remember, they won’t learn unless you show them how.

Raising and Teaching a Teenager Isn’t Easy 

But as parents, we should always give 100% to them so they can grow up to be efficient and competent adults. Kick start your children’s journey in financial literacy now by guiding your teenagers to manage their money properly!

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  • […] Try talking about values instead of numbers. You don’t need to expose your exact salary or how much debt you have, but instead, focus on the importance of saving, giving, budgeting or paying down debt. You can read more about how to help them manage their money here.  […]

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