Setting Your Teen Up for Financial Success in Adulthood

Setting Your Teen Up for Financial Success in Adulthood

I was absolutely terrible with our finances when I was in my teens and 20s. In fact, most of my Friday paychecks were blown at the Mall of America leaving me with little to nothing come Saturday. What I know for sure as a part is that I do not want the same for my kids. If I am able to prevent them from any financial slip-ups then I have done my job. With my younger two, it has been easy and I hope they get a firm grasp on money by adulthood. For our teenager however, it has been more of a hustle. Trying to instill in her as much as I can before she flies the coop. If you find yourself in that same boat, I’ve got great tips for setting your teen up for financial success. 

*This post contains affiliate links through which I may make a commission. All thoughts and opinions are my own. 

You’re still the parent

The teen years are tough, there’s no doubt. But, when it comes to guiding your teen through managing their finances, it’s important to remember that you are still in charge. Take full advantage of these last few years while you still have a say. Don’t take advantage of them, take advantage of the time you have left to set them on the right financial track.

Sometimes you might have to get tough and put your foot down. You’ll have to push them to save more or encourage them to postpone a major purchase. It won’t always be easy.

This also means that you’ll have to be patient while they learn and lend a helping hand if they need it. If they work less to study for finals, be willing to help them still get by. They need your compassion and understanding too so they don’t put all the weight on their own shoulders.

They’re still the money earners!

Just like you have a say for the next few years, you need to let your teen know that they have a major say in what happens to their money as well.

Nothing makes a teen more frustrated than a parent on a power trip. That’s not what this is about and they should know that.

Sit down with them, listen to what they have to say and be willing to compromise. After all, this is something you want them to continue into adulthood, not tolerate until they are out of the house.

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Make a plan together

Take the time to sit down with your teen and work out a financial plan together. Let them know the few things that you expect (savings, giving, budgeting) and then work out the solutions together.

Talk about goals

What are the major goals for their lives? For us, our daughter wants to travel the world. So, we made sure to set up a travel savings fund for her! Because she won’t be traveling until after she graduates, we chose a premier money market account so her funds will gain more interest. Plus it only requires a $100 minimum to open.

No matter what their life goals, help them set up a financial plan to help them achieve those goals.

Set up a savings

Every person, especially teens, should be practicing saving their money. We all know that life throws us curveballs, make sure they have a cushion to fall back on.

A great option for teens is either a traditional checking account through your bank or a high yield account that allows them to gain interest but still make multiple withdrawals and deposits.

Depending on their individual dreams and life goals, they may benefit from multiple savings accounts for both short term and long term savings.

Allow them to manage their money

The best way to help a teen manage money is to just sit back and let them do it!

This method may vary from household to household. Some people choose to give their teens cash, while others will allow them to open their own checking account.

If you aren’t sure how to get started, or if your teen should even have a checking account, here is a helpful guide to answer all your questions.

Related posts:

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Create a budget

Once you have talked through the different types of accounts you’ll want to open and what each of them offers, it’s important to sit down and create a solid budget that everyone can agree on.

My Fun Sized Budget Bundle is perfect for a teen just starting out. It offers an easy to follow budget plus methods for saving and shopping smart.

Some things to consider for a budget:

  • Giving – we always encourage giving for our children. Not only does it teach generosity, but it also loosens the grip money tends to have on people.
  • Saving – Before money is spent, remind your kids to give to themselves.
  • Additional savings – Are they saving for a big goal or dream? Make sure you plan for it!
  • Food – Teens love spending money going out to eat with friends or picking up fast food after work. Help them plan for this, so they don’t over-spend.
  • Gas – Remember the days of not filling up your tank because you couldn’t afford it? (No? Just me?) Don’t let this be them! Help them calculate their gas and budget for it.
  • Sinking funds – Sinking funds are the best way to help them plan for big purchases that they know are coming. For our daughter this means her $100 parking pass for school in the fall.
  • Bills – Naturally, a budget should include making bill payments, right? It’s my belief that far too many parents pay their kid’s bills for too long. In reality, it helps them so much in the long run, although it may not be a popular topic.

What bills should your teen pay?

Asking your teen to pay their own bills is not asking them to start paying rent as soon as they get their own job. They are most likely only working part time after all and are still kids. So what bills might be good for them to start paying?

  • Phone bills
  • Car insurance
  • Car payment – Try sticking with a less expensive car and a smaller loan and then encouraging them to save and pay cash for a better one

Find a few bills to start with that they are fully responsible for. This will help give them ownership and teach them what it’s going to be like in the real world.

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Extra tips

  • Encourage bigger saving during summer months when they work more.
  • Encourage them to pursue work that makes them happy.
  • Show them money can work for them or against them.
  • Be patient. They will make mistakes. We all do.

Don’t Forget to PIN This!

How in the world do you teach a teen to manage money!? It's all right here. #teen #budget #money #finances #beginnerbudget

 

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About The Author

Renee

Renee is the blogger behind The Fun Sized Life. After downsizing with her family, she also took the time to get serious about he finances. Now she is sharing the wealth with all of her readers.

13 COMMENTS

  1. Allison | 11th Jan 18

    I love these tips!!

    • heartsoulwhole@gmail.com | 11th Jan 18

      Thanks so much Allison!

  2. Angie | 11th Jan 18

    Great post! It is so crucial to adulthood to teach them young.

    • heartsoulwhole@gmail.com | 11th Jan 18

      We’re working at it!

  3. Laura @ The Mindful Mom Blographer | 11th Jan 18

    These are really great tips. Your experience in your 20s sounds EXACTLY like mine. I wish my parents would have worked with me like you are working with your daughter! We definitely plan to start super young with my son!

    • heartsoulwhole@gmail.com | 11th Jan 18

      It’s frustrating. There was a time I was working 3 jobs after high school…where did that money go? I remember saving $1,000 in less than a month because I had something I wanted to do….1 month and $1,000 saved…imagine if I would have stuck with that and not BLOWN that money immediately! ARGH.

  4. Marie | 11th Jan 18

    Loved this! I’m thinking it’s time we start something similar with our tween who seems to think money grows on trees.

    • heartsoulwhole@gmail.com | 11th Jan 18

      Ohhh I’ve been there. I don’t care if she keeps thinking I’m cruel, at least she’ll have money set aside for her when she needs it most!

  5. Melissa Javan | 11th Jan 18

    Great post. I love the tough love aspect. Your daughter will thank you in the future.

    • heartsoulwhole@gmail.com | 11th Jan 18

      I sure hope so!

  6. Debbie | 11th Jan 18

    I couldn’t have found this at a better time. My daughter is 16 and looking for her first job. I have pinned it so I can keep referring back to it as in two years again My other daughter will be at this stage!! Thanks!!!

  7. Logan | 13th Jan 18

    These are great tips! I’ll definitely be pinning for when I have kids. I love how you teach yours financial responsibility early! Thanks for sharing. 🙂

    • heartsoulwhole@gmail.com | 13th Jan 18

      Thanks so much Logan. I’m definitely trying.

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