Do you want your teens to become successful adults? Then they need to understand money and manage it well. Here’s how to teach your teenager financial responsibility!
Raising financially responsible kids and teens takes time and work, but pays out great dividends in the long run!
I’m sure you want your teenagers to become financially self-sufficient and money-smart adults. So, what do you do?
Here’s how to teach your teenager financial responsibility:
(This post contains some affiliate links for your convenience which means if you make a purchase after clicking a link I will earn a small commission at no extra cost to you. Click here to read my full disclosure policy.)
1. Avoid Debt
In my opinion, one of the most important ways to teach your teenager financial responsibility is by teaching them to avoid debt, most especially credit card debt.
In 2021, the average credit card debt for American families is around $6K with nearly half of all US families carrying some credit card debt.
Credit card debt is the worst kind of debt, as opposed to a mortgage, for example, because you are merely paying more for an item than it is actually worth (because of the credit card interest).
My parents helped me get a credit card when I was a teen. It had a low rate and a $1000 limit (and I still have it and it’s still the same!). They taught me to pay it off each month and use it wisely.
If your teenager is very responsible with money, you might consider helping them get a credit card while they are living with you and monitoring it each month. However, I would honestly strongly emphasize that they should never use a credit card (not even in “emergencies” – that is what an emergency fund is for.)
Check out this post for more tips on talking to teens about credit cards.

2. Keep a Budget
The teenage years are a great time to start to budget! Income and expenses are generally low and easy to track, plus you will be there to help your teens learn from their mistakes.
Help your teens get in the habit of writing out a budget each month and going over it carefully. The easiest type of budget to teach them is a zero-based budget, where you account for every dollar and what you are going to do with each dollar (spending, savings, investing, etc.). Thus, your income minus your expenses should equal zero.
You can help your teens get set up with a budget with these 5 easy steps.
3. Make Wise College Choices
Yes, your teenager might think it’s fun to go to a huge party college that all his or her friends are attending out of state, but practically and financially speaking it might not be a great long-term choice.
Help your teens make smart college choices and teach them how to avoid college debt in the first place! Most employers won’t care which college your teen attended, but will focus on what your teen actually does with the degree.
4. Talk about Saving and Investing
Start talking about saving and investing as young as possible because the best way to grow money is to take advantage of the power of compound interest and the younger you start the better off you are!
Be sure to talk about IRAs, 401Ks (and the employer match!), and the basics of investing.
One of my favorite investing books is this one by JL Collins:
The basis of this book comes from a series of blog posts that he wrote as money lessons for his young daughter to start her out on the right financial path. It is a simple book showing outlining a path of what to do with your money in the long run.
5. Set Savings Goals
Show your kids how to set and achieve savings goals (and not use credit cards!).
Do they want a car?
Don’t go out and buy one, but show them how to set and reach that financial goal! Not only will they learn valuable money (and math) skills, but they will feel a great sense of accomplishment when they reach their goal.
6. Start an IRA Early
Help them set up an IRA as soon as possible. Teens can actually open a Roth IRA when they start having earned income from a real job. Then, they can contribute every year and take advantage of compound interest. Show them these charts and discuss the benefits of starting an IRA early.

7. Making Conscious Purchases
Teach your teenager how to think about and plan purchases and avoid impulse buying.
Let your teen help with the grocery budget for one month.
If you need to make a big purchase (like buying a new couch or refrigerator), research prices together with your teen and compare options.
Show them how to make smart money choices.
When I was younger, I would calculate how many hours I would have to work to get an item (say $100 pair of pants would take me 10 hours of work at $10/hr). and that always helped me determine whether I really needed it, haha.
8. Give Them Financial Responsibility
Teens won’t be able to figure out money if they don’t have any to work with.
Give them opportunities to handle and manage money on their own.
Encourage them to:
- Get a job
- Open a bank account
- Make their own purchases (i.e. don’t buy them everything they want)

9. Let Them Make Money Mistakes
Lastly, let them learn by making mistakes.
There is no better lesson than using your own money to buy your own things.
Give your teens boundaries around purchases and let them make their own choices, like:
- You are responsible for buying your school clothes this year and here is your budget.
- You can join this club, but you will be responsible for buying the supplies.
- If you want to go to that concert, you need to earn money to pay for the ticket (or pay for half).
Be kind and understanding, but don’t always bail them out. Teach them how to budget and problem-solve if they run into problems down the line.
It’s far better (and cheaper) for teens to learn from their money mistakes while still in your home and under your guidance than to make a huge financial mistake when out on their own.
Since starting my 6-year-old daughter on earning money through chores, she has gained an understanding of money and what items are worth. One day she wanted to buy an item (at $100) but she told me, “Mom, it’s too expensive!”
Start your teenagers out on the right financial path with these 9 simple tips and they will have a head start over their peers. How are you teaching your teenager financial responsibility? Share your ideas in the comments below!
Related: 5 simple steps to teaching teens budgeting
Related: Teaching kids and teens about credit cards