Teaching your Teen Financial Responsibility: A Parents’ Guide

As parents, one of the most valuable skills you can pass on to your children is a solid understanding of finances and how to manage them.

We know it is important to help improve financial literacy in society as a whole, and especially among the new generations, providing them with the basic knowledge and useful tools for managing their money.

However, many parents share a common problem: their own parents never taught them how money works when they were young themselves.

To break this cycle, you can explore strategies that will help you to nurture the sense of financial responsibility in your children.

Here is a short guide:

1. The basics: income, expenses and savings

Where to start? At the beginning, of course. Knowing and understanding the basics is the first step towards a good financial education.

What should you achieve?

• For your children to be familiar with the basic concepts: income, expenses and savings.
• To strengthen your teens’ relationship with money, teaching them how to spend it and the importance of saving.

These principles can be acquired early on, setting up an allowance for your children and letting them manage it.

2. Setting financial objectives

Planning ALWAYS requires objectives.

• It teaches you to set clear goals, such as saving up for things you want, university or retirement.
• It gives you a long-term view of finances.

They do not need to be too complicated, but they should help the teen to understand why it is important to manage their money properly.

3. Budgeting for financial learning

So, you have established the basics and set some goals. What next? Now is the time to introduce budgeting as an essential tool.

The budget:

• It helps distribute your income to cover essential expenses and determine savings.

• It offers control over your finances and prepares you for future financial decisions.  

The budget acts as a kind of guide for the teen’s finances.

4. From theory into practice: examples and tips

These concepts may seem very simple to us, but they might not be so easy for them. At the end of the day, they are learning.

If you want your teen to get to grips with these ideas and to really take them on board, here are a few tips:

• Be practical: use everyday situations.
• Give examples: get them to normalise good financial practices.
• Teach them to track their spending: apps can be a great help in this.
• Foster financial responsibility for a stable and secure future.

Guiding teens in managing their finances is the best gift you can give.

Only with guidance, practical experience and ongoing support can you build a solid basis for good financial health.

And to end, here is a quick summary of the four points:

• Teach the basics: income, expenses and savings
• Help them to set objectives
• Create a budget together
• Give examples and convey the principles of financial responsibility