Teaching teens about money in the early years helps them prepare for any financial situation when they are eventually on their own. Many teens go through financial struggles that could have been avoided if they learned early on how to manage their money. Talk about the following topics with your teens so they can develop good financial habits.

Needs Versus Wants

Teens can be quick to claim that they need a lot of things in their lives. So, you’ll have to establish a baseline between what they really need and what they want. Use common things around the house or in stores to help them figure out what is really important to get for their daily lives.

For example, talk with them about the $200 shoes that they want. They will try to argue that they need the new pair. Yet, if they already have three good pairs available and the new shoes cost more than their paycheck, then you have to show them that it is better to save their money for other things. Those new shoes are actually a want.

It is also important to note all the little expenses you may currently pay for that they take for granted. For example, their mobile phone bill, Netflix, Spotify, Hulu, and other subscription services. While you may not make them pay for all these items now, it’s important that they understand just how much all these items cost as a whole.

Make a list of all the things that you might pay for on their behalf and go through what is a need (things you need in order to live or can’t do without), and things that are wants (things you can do without.) This is actually a great exercise for adults too!


  • School or job supplies
  • Gas
  • Car insurance


  • Video games
  • New clothes
  • Vacations or trips
  • Streaming services

Not sure how to categorize something? Ask these questions:

  • “Do I have one of these that works just fine?” If the answer is yes, the new thing is a want.
  • “Do I have something else that does that same thing?” If the answer is yes, the new thing is a want.
  • “Do I need this to do my job/for school/to live?” If the answer is no, the new thing is a want.
  • “Is there a free version of this?” If the answer is yes, the new thing is a want.

Help Create a Budget

Learning how to balance a budget is another important lesson in teaching teens about money. Have them write out how much income they make from a part-time job or allowance. Then, they can list their one-time and reoccurring expenses. Your teen can gain a better understanding about their cash flow, and determine places where they may need to cut back on their expenses so that they can start to save money.

Open a Teen Checking/Savings Account

To learn how to manage their money, teens should get a savings and checking account with a debit card (Note: A parent will typically have to be a co-signer on the account if the teenager is under 18 years and has a debit card.) With a checking account, they will be able to make both in-store purchases and mobile/online purchases.

By getting them familiar with a debit card and showing them how to check their account online early on, you’re preparing them for when they have a job and their own money.

With Money FCU’s teen debit card, we offer some unique benefits:

  • Set optional spending limits (i.e., parents choose X dollar amount and any transactions over that are declined)
  • Joint owner/parent can monitor the teen’s account from their own online account
  • Set alerts so the joint owner/parent gets a text every time the teen makes a transaction
  • Turn the teen’s debit card on or off if you see something suspicious

Teach Them Good Debt VS Bad Debt

With the number of television commercials and social media ads concerning debt problems, most teens will think that all debt is bad. Yet, they should also know the types of good debt that can help build good credit history and will help them later on in life.

Teach them how to recognize good debt, such as:

  • Home mortgages with low interest rates and good payment terms to build equity
  • Personal loans used to make home renovations, consolidate debt, or start a business
  • Student loans to earn degrees and obtain future careers
  • Vehicle loans for transportation purposes

Also teach them about bad debt. Bad debt can come in numerous forms, such as:

  • Credit card debt from wants vs needs (new clothes, electronics, vacations, etc)
  • High-interest personal loans things they don’t really need
  • Payday loans
  • Buy Now Pay Later loans for things they don’t really need (Affirm, Klarna, PayPal, etc)

A teen that develops good money management habits now will be better prepared for the financial situations that they will encounter as they get older. Make sure to cover the above topics with your teens. Even if they should stumble with their finances, they will be able to learn and recover quickly at this young age to become better budget planners throughout their adult lives.

We’re Here to Help!

Teaching teens about money may seem scary, but it’s really just a conversation you need to have now before it’s too late. If you would like to open a Savings and Checking Account for your teenager, or have questions on how to make a budget or get started with your teen, call, chat, text, or stop in! We’re here M-F, 9am-4pm ET – (315) 671-4000


Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.