It might seem tricky at first to teach a teen about how to save money, but it doesn’t have to be. In fact, the sooner they start learning, the better off they’ll be in the long run. Even from their early teen years, your child can be trained to handle money responsibly, make smarter financial choices, and build financially healthy habits that will stick with them for life.
Here are some practical lessons your teen should learn about saving money (that you can also practice with them as their parent):
1) Make Them Earn It
Teens probably know that money doesn’t just magically appear, but they have no concept of what goes into earning it. If they want to earn more than their allowance, you can give them a practical taste of something called “work,” which could range from doing chores or working part-time on freelance projects.
Any way they earn money, the experience can radically change their attitude towards what they have. Once they realize how much work goes into earning even a small amount, they’ll be more thoughtful about how they spend it.
2) Set Goals Together
Next, find a way to motivate them by making sure they have a purpose to save. Saving for the sake of it isn’t exactly exciting to a teen, and they may not do it if they don’t see the point. When they realize why it makes sense to save money just for themselves, they’re more likely to make good choices. That isn’t just speculation—a 2023 study from Champlain College, for example, shows that teens who receive financial literacy education in school are better at managing their money as adults.
Help your teen set a specific goal to save up for, whether that’s funding a new phone, a gaming console, or a special day out with friends. Break it down into manageable chunks—say 10 percent of their weekly allowance—to keep them motivated. This also teaches them patience and that great feeling of working toward something they really want.
3) Open and Track Expenses from a Family Bank Account
When they’re old enough to handle a debit card or credit card attached to your account, introduce your teen to the world of banking, which will be like their rite of passage into financial responsibility. Start them off with a savings account to give them a safe place to stash their cash and show them how interest can help their money grow.
Walk them through the process of opening an account and explain how deposits and withdrawals work. You should also encourage them to check their balance regularly to make saving feel real and more rewarding to them.
4) Set Criteria for Needs and Wants
Most children get what they need as a matter of course, so they’re driven by what they want. It’s super important to teach teens the difference between needs and wants. One important lesson they should learn now is that needs cost money; sometimes, wants have to take a back seat.
It may be especially easy for teens to get caught up in the latest trends or feel like they have to have that new pair of sneakers or the latest gadgets. Knowing that, helps them understand that needs—like food, school supplies, or basic clothing—should come first. If they really want something, they must be able to save up for it.
5) Walk the Talk
Teens learn a lot from what they see, so setting a good example is key. If they see you being smart about saving and budgeting, they’re more likely to follow your lead.
Discuss money matters openly by sharing how you set aside money for family needs or emergencies. Give them examples of how saving helps you plan for the future, like their college fund. Even showing them how you prioritize can make a big impression on them.
It also helps to share practical tips. Show them how to compare prices, wait for sales, or check out online reviews before making a purchase. For example, if they’re saving for a new gadget, encourage them to research the best deals or see if there are any discounts coming up. According to an IPSOS study, 42% of shoppers regret impulsive buys, so teaching your teen to think before they spend can save them (and you!) a lot of stress later.
6) Bring Up Emergencies
Most teens are oblivious; they have no idea how easily (and fast) things can go wrong, and how that can affect the family budget. Your role as the parent is to raise their awareness. Talk to them about setting aside a small portion of their savings for unexpected expenses, like a lost bike or a broken phone. This will help them build the habit of topping up their emergency fund, which will be a lifesaver when they’re older.
7) Celebrate Milestones
When your teen hits a savings goal, make a big deal out of it. A high-five, a special treat, or even just acknowledging their effort will reinforce that saving is worth it. Your celebrations don’t have to be extravagant—just something to show them that their hard work paid off.
Start Them Young
In a nutshell, helping your teen learn about saving money should consist of more than just teaching them how to set aside cash, but imparting upon them the mindset that makes it easier to choose intelligently when it comes to finances. Encourage good habits now, and you’ll set them up for a future where they can handle whatever comes their way in their adulthood.
