“Did you remember to tip?” I asked my 13-year-old. “Yes. I used my phone and tipped 20 percent like you said.” Until earlier that day, I hadn’t really thought about financial literacy for teens, including teaching my kid about tipping. After all, my husband or I always handled the restaurant checks. But, she’d asked to go out to lunch with her friends to a sit-down restaurant while the moms sat at another table. She needed to know when and how much to tip.
The good ol’ piggy bank often marks the beginning of a child’s relationship with money. However, as our kids grow, their understanding of money matters needs to grow, too. Teach your child financial literacy for teens by covering these 4 money maneuvers.
1. Track your spending.
We get it. For many adults, talking about budgeting can stir up stress and anxiety. However, teaching kids about money can positively change how they view finances and empower them to make wise choices. Your teen probably has no idea how much food, car insurance, or even that school yearbook costs. And he also might not recognize how combo #1, a movie ticket, a tank of gas, and two grande drinks add up to quite a chunk of change in any given week. Teaching your teen to track his spending helps him grasp costs, know where his money is going, and identify areas where he can cut back. Financial literacy for teens starts with budgeting.
Speak your teen’s language by using budgeting apps with him, such as:
GoodBudget: This simple budgeting app relies on the traditional envelope system to help people
budget their monthly expenses.
FamZoo: This family finance app is designed to help parents teach their kids to earn, save, spend, and give money wisely.
Or, start with our simple “Share Save Spend” printable to lay out the basics.
2. Comparison shop before spending money.
“Do you think they price match?” my 14-year-old texted me from the LEGO aisle at Target. I had no idea, but I encouraged her to ask. She’d been saving for a particular set for a while and saw it listed for 30 percent less online. Many popular brick-and-mortar stores offer price matching. However, they don’t post signs about it in the stores.
Comparison shopping extends beyond pricing, too. Lead your teen to strengthen real-world critical thinking skills by asking questions to evaluate product features, customer reviews, and other relevant information. For example, ask: What do the reviews say about that product? Will that dress last through more than one washing, or is it better to spend a little more for better quality? Is the brand worth it to you to pay 50 percent more for the same product?
3. Keep an eye out for financial scams.
When financial scams are mentioned, the image of an older adult unknowingly sending money to a con artist comes to mind. But it’s not just the older generation falling for financial scams. According to the FTC, teens and young adults are falling for them, too, and cases are on the rise.
“Younger adults reported losses to online shopping fraud—which often started with an ad on social media—far more often than any other fraud type, and most said they simply did not get the items they ordered,” reports the FTC. “Many college students reported that they were scammed after getting a message at their student email address about a so-called job opportunity.”
Financial literacy for teens can include walking them through vetting sellers they find on Google searches, TikTok, or Instagram, or on Amazon or other online shopping sites. Teach your teen to read the reviews and check out websites. If the customer feedback sounds sketchy or you see only a few posted, pass on the offer. And don’t order a product if the company website contains misspelled words or incorrect grammar.
4. Use credit cards responsibly.
We aren’t advocating for kids to sign up for a credit card. However, when your child turns 18, she’ll start receiving credit card offers. Our oldest daughter received six different offers the week after her 18th birthday. Your child probably will, too, regardless of whether she holds a job or is still in high school.
Before your child’s first credit card offer arrives, discuss the basics of credit and debit cards. Since they look the same, make sure she understands the difference. Walk your teen through a sample statement and explain due dates and minimum payments. Encourage open communication about the potential risks and rewards associated with credit cards. Talk about your hard-learned lessons about credit card use. Used wisely when she is older, a credit card can build her credit score, which can affect everything from car loans to apartment rentals in the future.
How do you feel when you have enough money to buy something you really want? How about when you don’t have enough?
