How to Talk to Your Teen About Financial Responsibility

How to Talk to Your Teen About Financial Responsibility

The teenage years are a time of dynamic change and unpredictability. So it might not seem at first like the best time to learn money management skills. In fact, there is not a better time to learn. Your teenager will be shifting from pocket money to part-time earnings – most likely – and they will also be spreading their wings in the world, meaning that they need to begin to learn the real value of money and the consequences of overspending. In this article, we look at some of the issues.

Earning Your Money

For younger teens, those below working age, pocket money is an excellent way to teach your children about responsible money management. That said, you don’t want to instil in them the idea that money will always be freely available to them. In their younger years give them a reasonable amount of pocket money and encourage them to save and pay for things they want. When they are of working age stop the pocket money and encourage them to find a job.

Spending Your Money

It’s a good idea to begin teaching your children about money from a young age. Chances are they will receive money from relatives for birthdays and seasonal events. Save this money for them. Let them know it’s available and use it for things they want, but don’t give them full control of it until they’re a bit older. Make sure they understand the difference between ‘want’ and ‘need,’ as well as the importance of financial security, before giving them full control of their money.


It’s too easy for teenagers to feel as if everything is provided for them and comes along without any effort. Talk to your teenager about the household budget, about what money comes in and how it is spent. Help them understand that without a job, they would not have the things they enjoy. For a period of a week, encourage your teenager to take control of the household budget. Put them in charge. At the end of the week, talk about the experience.

Consequence of Overspending

Good money management teachings often involve the aspect of saving. If your teenager has pocket money or a part-time job, you should be encouraging them to save. If you have some control over their savings, then you have an opportunity to teach them about overspending. Explain to them that savings are off-limits if they overspend, in the same way, an overdraft should be off-limits and only used in emergencies. You could also teach them How do debt relief programs work? They should switch into this mindset earlier when the money is small.

Taking Responsibility

Taking responsibility for your financial resources comes down to understanding the dynamics of earning and spending. The best way to instil this in your teenager is to give them responsibility for their financial life as soon as possible. At first, with pocket money, later with a part-time job. When a teenager understands how money is earned and how much they have to work with, it’s up to them to use it wisely. If they overspend and need to use their savings, avoid bailing them out. Use opportunities to teach responsibility.