Teaching teens about money

Teaching teens about money
OCCU  -  04.19.2019

When your teens use their own money to buy things they want and need, you start to see a thrill of buying and satisfaction take hold. Once your kids reach their teenage years, they want big-ticket items, like video games, a new phone or a car that requires a little extra planning. Teaching teens how to save for these bigger-ticket items isn’t easy, but it’s an essential skill that will help set them up for future financial success.

Set a goal and budget

The next time your teen asks for a big-ticket item, sit down together to establish a goal, create a budget and develop a path to get there. Show them the power of shopping around to compare prices before settling on a goal. Doing the research up front will help them set the right goal. And, they might be more likely to find the best deal or an alternative that’s less expensive.

Once you have an idea of how much the budget goal is, work together to figure out how much they can realistically save and how far into the future that will be. If the goal is $250 in 10 months, they’ll need $25 a month to get there on time. Is that realistic or too far out? If they’re working a steady after-school or summer job, they might be able to contribute more than that. If not, they might have to stretch the goal out a little longer or reconsider.

Create a savings plan

At this point, you’ve established what their goal looks like and how much they need to get there. If you and your teen are able to track progress, it’ll be easier to stay motivated and on track. Try an app to set savings goals and budgets. (Tip: you can do this in OCCU’s online banking!)

Here are a few ideas to make the process a little more engaging:

  1. Identify milestones to celebrate the half-way point or other marks of success.
  2. Set up automatic transfers from checking to savings, if they have accounts already. If they don’t, consider setting up a checking and savings account.
  3. Pick a percentage of any money earned to save automatically. This way, they won’t be tempted to spend it.
  4. Consider matching some of what they save to help them reach their goal.

Watch their money grow

If your teen isn’t bringing in regular income, another savings option could be a longer-term investment, like a certificate of deposit (CD) that pays higher interest rates than a primary savings account but locks up the money for a set amount of time. They may also have minimum balances. The great thing about CDs is that they’ll know exactly how much they put in and how much it’ll earn during the time you’ve set. These are good options for saving for big-ticket items such as a car or college expenses. And it might be a good time for you to team up with your teen and both contribute some money toward this larger goal.


No matter what path you take, it’s all a learning process. Most of us have been there – spending too much, falling short of savings goals, missing a payment. But it’s in those mistakes that you learn valuable lessons, and there’s no better time to learn them than when you’re young

Get more resources to teach your teen about finances here.