Teen Finance and Money Skills

Teen-Finance

$$$ signs probably light up in your teenagers eyes whenever you sit them down to talk about money. Teenagers seemingly need money for all sorts of activities and probably come bounding in your room asking for some at least a few times a week. Thus you understand that there is a real need for teenagers to understand the ins and outs of finances and savings.

First you need to help your teenagers understand your family budget and how they fit within it. You do not need to go into detail, but a cursory understanding of how much money is coming in and where it goes each month can give your teenager an appreciation for the money they use.

Second, you need to help them learn how to make their own money. Be it chores around the house or an outside part-time jobs, teenagers should be contributing to their own finances. Here are some ideas for job-hunting for your teenager:

  • Mowing lawns, shoveling snow, gardening, or other similar outside jobs
  • Summer camps
  • Tutoring other kids
  • Pet-sitting neighbors animals
  • Working for an elderly neighbor
  • Making websites for small companies or teaching others how to use computers
  • Babysitting services
  • Work at the local swimming pool
  • Sell your own arts and crafts
  • Deliver newspapers
  • Work at a golf course

Sometimes a summer job can be a family necessity. Many workers lost their jobs during the recession, and some are still unemployed. A teen’s contribution to the family income may be extremely important. Even when it’s not needed, a teen’s income can help him or her afford extras or save for college.

A summer job gives a teen the opportunity to ease his or her way into the workforce. Employers know that students coming to work for them need training and don’t have much experience, and if they’re wise, they’ve set their sites accordingly, so the atmosphere is often a good one in which to learn the ropes.

Having work experience prior to graduation means that there won’t be as much of a learning curve when the teen – now a young adult – enters the workforce. Having a little experience with office politics, office deadlines, handling a weekly or biweekly paycheck, etc., not only makes the recent grad in-the-know, but also gives him or her items to list on the all-important resume, whether for admission to higher education or for a job application.

The recommendation of an employer can be valuable as well. Students may use employer’s recommendations in their higher education application material and cite them as references in their job hunting after they graduate.

Types of Jobs a Teen Typically Can Hold
Most jobs that a teen can hold are entry-level jobs and neighborhood jobs. Typical entry-level jobs include working as a cashier or sales clerk at a retail store that caters to teens or at a grocery store; stocking shelves at retail stores; delivering papers; and restaurant work, such as waiting tables and dishwashing.

If a teen is fortunate enough to have an area of expertise, he or she may be able to teach or coach or do other work related to the specialty. Teens who have participated in sports and developed a talent in sports or the arts may be able to teach swimming or give piano lessons or tennis lessons or coach younger kids who are learning soccer or track, for example. A teen who excels in or is a native speaker of a language other than English might give language lessons, and a teen who is especially good in school might tutor younger students or students who are less able. Teens who play golf also work as golf caddies at golf courses, and teens who ride may find work at the stables. Teens who juggle or do magic tricks may get gigs performing at birthday parties.

Once your teenager is making their own money, strongly encourage them to save at least a portion of it. If possible let them use your money for their activities and have them save all of their money for future expenses such as college. Teaching them to save regularly will give them a financial skill that should serve them for the rest of their lives. Here are a few tips on teaching them to save and manage their money wisely:

  • Show them the math. Explain what will happen with their money the more they save.
  • Teach them to save a portion of their check as soon as they receive it.
  • Carry little money, it easier to spend cash then it is to write a check.
  • Explain debt and how it can affect them. Research some of the college they want to attend and give them rough numbers of how much it will cost them.
  • Tell them that in all purchases, not to impulse buy. Have them wait and think about buying things before actually buying it. That should save them from buyer’s remorse.
  • Discuss credit cards. Show them how it is not free money and how interest rates can bite back quickly if they do not pay off the charges when they are due.
  • Periodically review your teenagers’ account with them

Finally, teach your teenager the joy of charitable giving. If they can see how people without much live, then it can give them a greater appreciation for what they have. Using these steps can help you give your teenager a good perspective on finances and saving.  Visit the following link for more on student credit cards.

Teenage Finances Sources

  1. Family Education, “5 Steps to Teach Your Teen to Budget,” [online].
  2. Family Education, “What Kids Need to Know About Credit Cards,” [online].
  3. The Motley Fool, “Teens and Their Money, Ways to Save and Make Money,” [online].