Teaching teens about money

A guide to money management and personal finance for young people.

Pocket money vs part-time job

Learning the value of money at a young age is critical for developing healthy financial habits as adults. The most effective way to teach teenagers about money is through hands-on experience managing their own finances. By teaching teenagers how to earn and manage a budget, they’ll learn a valuable skill that’ll stay with them throughout their lives.

To help give your teenagers the best possible financial start, we’ve pulled together this handy guide to money management for young people.

teenage girl sitting down holding money and a piggy bank

How can I teach my teen about money?

Everyone learns differently, so the most effective way to help your child learn about money will depend on their unique learning style, your family life, and existing commitments. 

For instance, regular involvement in extracurricular activities, like sports or clubs, may make it challenging for them to take on a part-time job. You may also prefer your teen to concentrate on school or college and only get a part-time job if they have ample spare time. 

If spare time is limited, you could offer them a smaller allowance to supplement their income. This would allow them to work fewer hours while still benefiting from earning their own money. Alternatively, you could consider a structured chore list - such as agreeing to spend Sunday mornings completing a set list of chores, in exchange for an allowance. 

Another option for self-employed parents could be for your child to provide you with admin support on set days after school or college. This not only enables them to view their allowance as a wage but also gives them a genuine taste of working life. 

Whichever path you choose, ensure you keep an open conversation about finances. While we don't want our teens to worry about the household budget or money struggles, they’ll likely benefit in the future from understanding the cost of their extracurriculars, how household bills work, and what it means to save. 

For instance, do they understand the 50/30/20 rule? Those who follow this spending-saving approach divide their monthly income with 50% of the funds reserved for needs, 30% for wants, and 20% for savings. Opening up a Young Savers account, or a Pocket Money Saver, will give your teen a place to keep their savings until they reach their goal. 

It’s also a good idea to set an example for your teens by following the 50/30/20 rule yourself. For more information about budgeting, check out our beginner's guide to money management.

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