Financial Advice for Teenagers

If your teenager is to be successful in life, they will need to learn ways to manage their money effectively. Some teenagers are careful with how they spend their money, while others are more reckless. Regardless of which category your teen falls into, they will need some good advice along the way.


First of all, it is important to encourage your teenager to set short-term, mid-term and long-term financial goals. A short-term goal might be saving up for a cell phone or a pair of designer jeans. A mid-term goal might be saving up for a new bike or a new computer. By far the most common long-term goal for a teenager is saving up to buy a car. Encourage your teen to write out all of their goals and to refer back to them often.

When it comes to a long-term financial goal such as buying a car, sit down with your teen and write out together the costs associated with owning a vehicle such as insurance, maintenance and repairs. This will give your teen a more complete picture of what it takes to own a car and they can plan accordingly.


From i-pods to video games, it seems that every year there are more things for your teen to spend money on.  Because of these many distractions, it is important for your teen to write down their goals.   And by reading his goals often, your teen can keep his eye on the prize.  In addition, encourage your teen to cut out pictures of what they are saving for from magazines or flyers.  They can post these pictures in highly visible areas such as their bedroom door or their locker as a tool for motivating your teen to save up as much as possible and to be successful in reaching their goal.

*Avoiding Temptations

Teens are not skilled at delaying gratification the same way that adults are. In addition, the number of markets competing for your teen’s dollar is almost endless. It’s easy for your teen to become side-tracked by television advertisements that are designed specifically for getting into their wallet. These ads are carefully chosen by teams of high-paid executives and they will play on your teen’s insecurities. If you are in the room when these commercials are on, point out to your teen how shallow and fantasy-driven they are. 

In addition, your teen may have to deal with the temptation of having wealthier friends who are buying all the latest gadgets. Remind your teen often that money doesn’t buy happiness or true friends. 

*Occasional Splurges

For additional motivation and encouragement your teen should write out more than just their goals. They should also have specific amounts of money allocated for day-to-day splurges. These splurges might include things like burgers with friends or a movie on the weekend. It is important to leave room for these little splurges so that your teen won’t get discouraged by the enormity of saving up for a car, for example. 

*Other Tips                

Lead by example. Show your teen that it’s not necessary to spend a lot of money to have a good time. You can enjoy low-cost hobbies like jogging, biking or writing and hope your teen will follow your lead.

Don’t come to the rescue every time your teen overspends. This will not teach him responsibility. It’s much better to you need to allow your teen to fail occasionally, no matter how difficult it is for you to sit back and watch.

And be careful that you’re not giving your teen advice about every single purchase or they will start to resent you. Just like giving a plant too much water will make it die, giving your teen too much advice will make them rebel and, ultimately, fail.

Above all else, have patience. Teens will have minor setbacks and this is to be expected.

In conclusion, there are many ways you can encourage your teen to handle their money responsibly such as showing them how to set long-term goals, leading by example and avoiding the temptation to rescue them. Remember, you are just giving them the tools to be able make their own decisions. At some point, they will need to stand on their own feet. If you follow the above advice, you will have given them the solid foundation they need to make it on their own someday.