Helping Your Teens to Manage Money

Growing up, my first real job was waitressing at the lunch counter of our local Woolworth’s store in downtown Redding. At the age of 16, I was making an awesome $1.75 an hour and feeling pretty special when that pay envelope hit my hands. Having been raised in a large family where money was tight, I learned through experience the value of being frugal.

We try to teach our kids to be street-smart and use good manners, but teaching them the financial facts of life can be difficult. As I have watched my own kids at their first part-time jobs, I have seen them “squander” their money on everything from junk food and ring tones to $500 prom dates.

You can set good examples of what it means to save, spend wisely and share with others. You’ll make more of an impression on your kids if they can see and hear what you’re doing to manage your money. Let them help with simple tasks like balancing a checkbook. The following are good guidelines for teens to manage their money effectively:

1. Start Saving Early.

One of the best tools is to start a savings account when your kids are 7 or 8. Even at $20 every couple weeks, the savings will add up to a noticeable balance by the time they are older. Many parents reward their kids for sticking with a savings plan by matching or adding to what they contribute.

2. Set Spending and Savings Patterns Early.

Encourage them to decide in advance how much should go into savings (the concept of “pay yourself first”) and how much should be set aside to share with others (for charity or holiday gifts).

3. Encourage Work Experience.

Summer or part-time jobs can teach young adults good business skills and how to be responsible. Or perhaps they are interested in starting their own businesses. They may truly enjoy earning and saving their own money.

4. Set Up Checking Accounts.

Helping your teen establish a checking account is an important step in teaching financial responsibility. Most community banks and credit unions offer special plans for teens.

5. Check Online Resources.

Sit down with your teen at the computer and visit personal financial literacy sites for tips and tools for good money management. My BOC offers resources at The FDIC has a financial educational program for youths between the ages of 12 and 20 that explain the basics of good money-management. You can order a free CD of the FDIC’s “Money Smart for Young Adults” at:

By setting some patterns while they are under your roof, your kids can learn good spending and budgeting habits, which will serve them well for the rest of their lives.

Linda J. Miles
About Linda J. Miles

Linda J. Miles has over 36 years’ experience in banking. Financial education for the community is one of her many passions. She is currently the executive vice president and chief operating officer of Bank of Commerce in Redding, CA.

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