by Emily Hechler 
“The team is going to Ted Drewes after the game. Can I have $10?”
“Can I have $20 to go to the movies?”
“I need $40 for gas.”
If this sounds familiar, then you likely have a teenager at home. As your kids get older, what expenses can they take on themselves?
Even if you’re financially well-off and can pay for everything for your teens, it’s important to consider the long-term effects. Will they learn to avoid impulsive spending? Do they know to create an emergency fund? Will they make thoughtful choices, like opting for a more affordable alternative, rather than overspending on something unnecessary?
Having teens save their own money can help develop the good financial habits they’ll need to take into adulthood. Finding a balance between spending and saving can be challenging as a teen.
Here are some tips on teaching your teens to save money.
Open a savings account. With a StepOne teen savings account at Alltru, teens have a dedicated place for their money to sit and grow interest. A parent or guardian is needed for 13-17 year olds to open an account. Only one dollar is needed to open the account. Plus, if your teen needs to pull money out of savings, they can easily do so with the Alltru CU mobile banking app.
Set savings goals. While saving money isn’t as fun as spending it, your teen will be happy to find the money waiting for them later when a large expense arises. Encourage your teen to set a savings goal. If they are working their first part-time job, encourage them to try to save a set dollar amount, like $1,500 or $3,000 by the end of the year. You can break it down into even smaller savings goals throughout the year so they can meet that goal at the end of the year.
Save a percentage. Your teen likely has inconsistent income from babysitting, mowing lawns, or working as a lifeguard. Since their paychecks can fluctuate regularly, encourage them to save a percentage instead of a set dollar amount. This percentage can work for individual paychecks, since it will all add to the same total at the end of the month.
Think long-term. Instead of saving money just for the sake of hitting a goal, think about the goals your teen might have over the next few years. Buying a car, paying for college tuition, or decorating an apartment might not be that far away. Saving money to dedicate to a large expense a few years out will cause less financial stress later.
Don’t impulse buy. Impulsive shopping is an easy bad habit to develop. Instead of making a purchase as soon as you see a desirable item, encourage your teen to wait a day or so and then come back for it if they still want it. This can be hard for teens, especially under peer pressure. Model the behavior yourself so your teen can see that it’s possible and something they won’t regret in the future.
Teach your teen to budget. If your teen has an income, it’s a great idea to give them some financial responsibility. Decide which expenses they can pay for, like gas, car insurance, a phone bill, or clothes. Get hands-on and create a budget together so they can learn to save money for their bills. When your teen sees their leftover money as more valuable, it can encourage them to think more carefully before making purchases. This approach helps prevent impulsive decisions and fosters more conscious money saving habits.
While letting your teen manage some of their own money can be scary, it doesn’t have to be. With these tips, you can help your teen make smart money moves. It might feel like a sacrifice to save money for a while, but like any habit, it becomes easier with time.
When your teen is ready for a big financial step, we’ll be here to help set them up for financial success.
