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Teaching Financial Skills to Teens

Teenagers learn financial skills by gradually taking on more and more responsibility. This involves giving them a limited amount of control over decision-making. The most important part of teaching teens about money is that you absolutely cannot bail them out if they overspend.

Encourage teens to save their money toward a major purchase or future college expenses. Offering to match their savings with an additional amount per dollar saved may be an extra incentive. Require them to deposit a certain percentage of their paycheck in their savings account.

Explain how credit cards work. Too often, young adults who get their first credit card perceive it as “free money”, and find themselves in debt very quickly. Make them understand that the $50 they spend today costs a lot more if they don’t pay it off quickly.