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Teens and Finance

Learning to understand your finances as a teen provides many advantages that will contribute to success in adulthood. Being financially responsible as a teen will help you understand the value of money and allow you to save at an early age. A number of important factors go into understanding how to manage money as a teenager. Several of the ideas you should think about are:

  • Financial management
  • Earning money
  • Saving money
  • Budgeting
  • Spending
  • Bank accounts

Learning about these core issues involving money will give you important skills that can benefit you for your entire life.

Financial Management

When teens get their first job and start earning their own money, it is vital that they start learning how to manage their own finances. Many people have difficulty knowing how to handle money properly, making it important to learn these skills when you are as young as possible. If you learn to save money and spend appropriately, you can have a huge advantage over your peers.

Earning Money

Learning the value of money is an important lesson. When you begin working for your own money, you are giving your time and energy to earn it. You can get a part-time job, a summer job or work for neighbors, doing things like babysitting, to earn money. When you earn your own money, it makes you prioritize what you spend it on, making you more likely to spend on things that are important or necessary.

Saving Money

It is important for teens to learn how to save money. The money ( teens make is usually not saved, however. A National Consumer League study found that 55 percent of teens work mainly for spending money. Only 35 percent work primarily to save. Learning to save is difficult for many teens, simply because it is more enjoyable to go out with friends or go on a shopping trip than it is to save. However, if you learn to save, it will give you advantages later in life. Saving for college, for example, will reduce or eliminate the need to take out expensive loans. A good rule of thumb is to save half the money you earn as teenager. It is easier to save while you live with your parents and have lower expenses than it is when you move out and have to pay bills. You never know when the money you saved as a teenager will come in handy so start saving early, allowing those funds to accumulate more over time.


An important skill for teens to learn is how to set a budget. It will help you live within your means and avoid paying high interest rates on credit cards or loans. Many teens get a job in order to buy a car, and buying a car forces a teen to learn to budget. Buying gas, paying for insurance, keeping the car maintained and keeping it running are expensive. Without budgeting for all these expenses, you may not have enough money to keep your car running through the years.


Teens, naturally, want to spend the money they have earned. You spend your time and energy to earn your money, so it makes sense that you would want to enjoy it. It is fine to spend some of your money, but it is not wise to spend all of it. If you follow the rule mentioned above to save half your money, you still have half your earnings to budget for spending.

Bank Accounts

One way for teens to learn to save move is to open a savings account. Having a savings account will give you an easy and safe place to put the money you are saving. It also makes it more difficult to access that money than if it were in your pocket. By opening a savings account, you allow yourself to keep spending money and start building up your savings as well.

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