As a parent, you want to encourage your child to make good choices – and learning how to manage money is part of that process. While the early years might be spent teaching the basics of money and how it is used, the teen years bring an additional set of challenges. Allowances, money from jobs, the constant bombardment from advertisers, and peer pressure to buy the latest and greatest, add a whole new dimension to learning the ropes of managing money.

1.) Create spending and savings patterns

Start by instilling the values of spend, save, and share in your teen. First, discuss using 10 percent of each child’s earnings for charitable contributions so that they can learn the value of giving back. Next, take an additional 40 percent and put it into a savings account. The remaining 50 percent can be used at the child’s discretion. By setting some easy to understand patterns while they are under your roof, kids can develop good budgeting habits.

2.) Get started on a path to build credit

Set up a checking or savings account, make regular deposits, and keep the account in good standing. Get your son or daughter started on the right financial foot today and it may be easier for them to someday buy a new car, mortgage a home or secure other types of loans. As an added bonus, having a checking or savings account allows your teen to learn about online banking and using ATMs. Sometimes they can even build credit without the risk of credit cards if you co-sign a small overdraft protection line of credit on the checking account.  You can monitor its use and help encourage the student to pay it off as soon as possible after it advances.

3.) Set goals

Have your teen write down a list of certain items or special gifts that they would like to buy with their money and set a reasonable date for the goal to be accomplished. Having an end goal in mind can help teens put away the money needed for that special something and can also serve as a great lesson on how to meet those goals through proper money management.

4.) Begin saving for retirement.

Yes, it is never too early to think about retirement. If your teenager is working, he or she should consider opening an IRA. A 40-year old investing $20,000 a year for retirement will end up with only half of the assets as a 21-year old who invests $5,000 a year. Even the smallest savings can turn into a respectable fortune if given enough time.

5.) Don’t bail them out

This is one of the most difficult, yet important lessons to teach. If, despite all your best efforts, your teen gets overextended on credit, take a firm hand. Let them experience the consequences of bad financial decisions. It’s better to help them take responsibility for a $2,500 debt than a $25,000 debt later on!

Other ideas to consider:

  • Work with your teen to develop a realistic budget, set long and short-term financial goals and plans for achieving them.
  • Cut back, not out. Is your teen spending $5 a week on food? If he or she saves $2 a week by cutting back, after a year there will be $104 to put in a savings or investment account that earns interest.
  • Discuss the difference between “must-have” purchases today, such as school supplies, and “would like to have” purchases, such as the addition of the latest fashion to an already adequate wardrobe.
  • Explain the advantages of deferring purchases today, such as the latest computer game, to save for another desired item, like a car or college education, tomorrow.
  • Promote shopping around before making purchases. Generally, it assures a better deal and discourages impulse buying. Also, take the opportunity to teach the importance of making a list before shopping (and how to stick to it).
  • Encourage the use of a personal financial management tool to track income, savings, expenses and debt. It is good to get in the habit of tracking monthly spending as small purchases such as magazines or sodas begin to add up after time.
  • Use financial (checking account, credit card, etc.) statement reviews as an aid to evaluate spending habits, promote sound financial practices and to teach how to watch for irregularities that could signal fraud.

The teen years can challenge even the most patient parent. However, by teaching important lessons about money management early on, you might be giving your son or daughter the gift of a lifetime of good financial habits.



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This article was prepared by Thrivent Financial for use by Loveland representative FR-Libby Greiwe. She has offices at 423 Wards Corner Rd. in Loveland and can also be reached at (513) 239-2933 or via email at [email protected].

About Thrivent Financial
Thrivent Financial is a financial services organization that helps Christians be wise with money and live generously. As a membership organization, it offers its more than 2.3 million member-owners a broad range of products, services and guidance from financial representatives nationwide. For more than a century it has helped members make wise money choices that reflect their values while providing them opportunities to demonstrate their generosity where they live, work and worship. For more information, visit You can also find us on Facebook and Twitter.

Insurance products issued or offered by Thrivent Financial, the marketing name for Thrivent Financial for Lutherans, Appleton, WI. Not all products are available in all states. Securities and investment advisory services are offered through Thrivent Investment Management Inc., 625 Fourth Ave. S., Minneapolis, MN 55415, a FINRA and SIPC member and a wholly owned subsidiary of Thrivent. Thrivent Financial representatives are registered representatives of Thrivent Investment Management Inc. They are also licensed insurance agents/producers of Thrivent. For additional important information, visit



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