Financial Literacy for Teens

Most teens learn their financial habits from their parents, so now is the time to set a good example.

Most teens learn their financial habits from their parents, so now is the time to set a good example.

Your child’s teenage years are a time of great change. They are maturing, growing and getting a better idea of who they are and who they want to be. As they grow older, teens also receive more and more financial responsibilities. They enter the workforce and get their first part-time job. This means they have more disposable income.

Teens also begin to have more wants and needs as they go from middle school in to high school:

  • Gas for their car if they have one
  • Paying for part of or all of their phone plan
  • Eating out with friends on weekends
  • Entertainment
  • Clothing

With these new financial responsibilities, wants and needs, it is important to help your teen understand the value of saving money, prioritizing purchases, the role of credit and budgeting in order to help them transition into being an adult.

Saving Money

Saving money is a skill that can serve your child as a teen until they are your age and older. While they currently live under your roof and rely on you for financial assistance, they need to understand this won’t always be the case. Enforce the need to save money now before they head off to college.

Prioritizing Purchases

This goes hand in hand with saving money. We’ve all heard the following reasons for wanting to spend money:

  • “All my friends are going”
  • “I’ll be the only one without (fill in the blank)”
  • “Because (fill in the blank) is awesome!”

Help your teen understand the difference between wants and needs by asking them to slow down and think, “Do I really need this?” before getting in line at the cash register.

The Role of Credit

To many teens, credit cards seem like free money. It is important to impress upon them that credit cards, like all credit or loans, comes with interest, late fees and other costs.


Budgeting will never be easier for your teen than it is now. They have relatively few necessary costs aside from gas for their car. Show them budgeting doesn’t have to be complex:

  • Add up their typical income for a month
  • Subtract their necessary costs, like gas
  • Subtract what they should save (10-15 percent)
  • Show them what they have to spend on everything else

The sooner your teen can learn better financial habits, the better off they will be when the leave the nest to head to college. If Putnam Bank can help your teen with any banking services like a checking account, savings account or our Online Services, don’t hesitate to come by any of our locations today.

Putnam Bank, Member FDIC and Equal Housing Lender