Teaching Teens About Money

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Although even very young children are capable of learning simple concepts about money, it’s the middle to high school crowd that it benefits the most. Because this age group is transitioning into young adulthood, they are also stepping into the role of full-fledged consumer. Many of them do not earn money exclusively from typical jobs, but instead from odd jobs, good grades, and allowances – or some such combination. In 2008, the trading and investment firm, Charles Schwab, conducted a “Parents and Money” survey. It revealed that among teenagers, 75% of them receive some type of cash allowance.

That’s a good thing, because it is also around this time that teenagers are bombarded by peer pressure. Much of it has to do with “having” what they’ll need to be “in” with the crowd they aspire to be a part of. Because the old saying is true – “The older the boys (and girls), the more expensive their toys,” there’s no time like the present for them to begin learning the value of money.

The following approach is one way to teach a teenager a few money managing skills. Hopefully, “The 3 C’s of Shopping” will keep them from squandering their hard earned cash on just a passing fancy.


“To look at thoughtfully” – that is, encourage the young consumer to reflect on what is motivating their proposed purchase. Is it an immediate need or just a want? Is the item in question worth the price? Is it something they will likely enjoy and use for a long time to come? In addition to posing these types of questions, suggest than rather rushing out to make the purchase, that they instead wait a few days and see if the need for it is still as urgent.

See related post, “3 Strategies for Avoiding Impulse Buys.”


Taking the time to compare products and prices can help you save.

Even though scores of teenagers are quite savvy about the prices of retail goods, teaching them to be comparison shoppers is a worthwhile undertaking. Thanks to the Internet, checking the prices of identical and comparable goods is a snap. PriceGrabber.com and Shopping.com are two useful sites. Many websites, such as Amazon and Zappo’s, have excellent, detailed customer reviews which can show a budding shopaholic that the brass ring they’re so desperately after is actually badly tarnished.

Count and Calculate

This exercise allows the young adult to comprehend the cost of the item they are contemplating. If their allowance is $20 a week, and if the object of their desire costs $150, it will take almost two months of saving their weekly allowance. That’s only if they save the entire amount; it will take longer if they use that allowance money for things like gas, fast food, or entertainment.

If they have a real job, help them calculate their hourly wage after taxes. For ease, let’s just say it’s $8.00, which is a generous estimate (minimum wage in the U.S. is currently $7.25).  For the $150 item, they would need to work around 19 hours. When the cost of something is broken down this way, it is usually pretty eye opening, regardless of one’s age!

Please remember like so many other things, money management is a learned skill. It just takes a little time and effort, but in the long run, it certainly pays off!

Teaching your teens how to manage money is important, as once they go off to college, they’ll have to rely more on themselves for budgeting. Take a look at this video that offers some budgeting tips for college students and keep them in mind when you prepare your teen:

Lisa is a cost-cutting, money-saving, life-simplifying guru, ready to share her secrets and the tricks up her sleeve. As a mother to a teenager and a twenty-something, avid surfer, and world traveler, Lisa knows how to live the good life on a budget. She covers topics that help us let go of wasteful and costly habits, and embrace those that do our wallets, our bodies, our families, and our planet some good!

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