Money Management Lessons for Parents to Teach Teens

A parent counting money with their child teaching them about money management.

Earlier this year, the Department of Education and the Treasury Department released the results of their third annual financial literacy challenge, a test administered to high school students throughout the country. The average score this year was 69%, a sign that today’s students are ill prepared for the financial responsibilities that they’ll face as young adults. Yet, despite a lack of money management expertise, young people still open credit cards, purchase cars, and take out student loans.

A young person holding a smart phone and a bunch of money learning money management lessons.

Personal finance skills to teach your kids

With little education about money management in the typical high school curriculum, parents are often the best resource when it comes to educating teenagers about finances. Here are some personal finance skills to teach your kids.

  1. Educate your teen about budgeting. Most teens don’t have too many expenses, so the budget should be simple. Show them how to track their spending for a few weeks, and then to set spending limits. If your kids are able to save money, whether from an allowance, or a part-time job, reward them for their efforts. Ultimately, kids will learn the most about budgeting from watching their parents. Do you ever find yourself thinking: Do as I say, not as I do…? Take a look at your own spending behavior. Chances are your own money management habits will rub off on your kids.
  1. Open a checking account for your teen, with yourself as a co-owner, so you’ll also be able to access the account. You can teach your teen about depositing money, using a debit card, keeping a record of all purchases, and monitoring the account to make sure it’s not overdrawn. This way, your kids won’t have to learn about overdraft fees the hard way.
  1. Introduce your teenager to credit only after they’ve shown they can handle a checking account. By opening a joint credit card account with a low credit limit, you can help your teen build credit. You should monitor the statements as well, because missed payments will also reflect negatively on your credit report if you’re a co-signer. Explain why making payments on time is so important by showing them a copy of their credit report at Also stress to your teen why they should pay off their credit card balance in full each month – to avoid having to pay finance charges, and to stay out of debt.

With teenagers going off to college with little to no financial background, it’s no surprise that so many get in over their heads with student loan debt. Before they go off to college, or move out on their own, give your kid a better chance at success by providing them with a solid foundation about credit and money management.

Article written by
Melinda Opperman
Melinda Opperman is an exceptional educator who lives and breathes the creation and implementation of innovative ways to motivate and educate community members and students about financial literacy. Melinda joined in 2003 and has over two decades of experience in the industry.

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