1. Giving Kids the Tools to Manage the Money They Earn

One of the best things you can do when a teenager starts earning money is help them manage it intentionally. The habits they build now will carry into adulthood. This is the time to instill foundational principles like saving, budgeting, and even investing.

Start with a simple budget

This is the ideal time to encourage the young adults in your life to track their spending. Work with teens to map out where their money is going – what portion they want to spend, save, and set aside for longer-term goals.  Encourage them to try a simple budgeting app, a spreadsheet, or just an old-school notebook. Schedule a monthly check-in to help them reflect on their choices (and see how difficult it can be to stick with a budget!).

Introduce saving as a habit, not an afterthought

Even if they only earn $100 a month, saving 30% is a great rule of thumb. If you can help them access a high-yield savings or credit union account (current rates above 3%), that’s a great way for their savings to grow. Below we’ve created a visual aid with a simple 3% interest model to illustrate the power of compounding. For example: put a starting $100 in their saving account and have them add $30 a month every month for the 4 years they are in high school. At the end, they’ll have $1,641 as opposed to $1,540. Simple exercises like these show teens that money can work for them.

Introduce investing early

You don’t need to overwhelm them with market theory. Instead, highlight some of the basics: what a Roth IRA is; how compounding works over decades; and how consistency beats timing. If they have earned income, consider contributing to a Roth IRA on their behalf (up to the level of their earnings only; not to exceed $7,000 annually) or let them know you will match whatever they contribute. With so much time on their side, a Roth IRA can be one of the most powerful tools they have for long-term financial health.

2. Setting the Tone for Shared Costs and Responsibilities

Teenagers often start using “adult” things (cars, phones, and meal delivery) without fully understanding the cost behind them. Living at home while earning money creates a teachable moment to help them connect their spending habits to real-world financial responsibilities.

Start small with shared expenses

Have them contribute to gas costs if they’re using the car regularly. If you want to go a step further, show them the car insurance bill and explain that adding a teen driver can double premiums. Talk through the real consequences of traffic tickets and reckless behavior. Make it clear that insurance penalties or legal fines are their responsibility. Having to spend their own money as a result of poor choices will cement the concept of accountability.

Use daily life as a financial classroom

Let them join you on grocery runs and ask them to estimate the cost of a weekly shop (or the items they use the most) before seeing the total. This simple exercise builds price awareness and helps them understand the relationship between income and expenses. It can be best to learn about real world expenses while still on someone else’s dime!

3. Laying the Groundwork for Independence

High school years are ideal for helping teens learn how to live responsibly under your roof before they take off on their own.

Talk about cost of living

Share what you spend on utilities, food, and streaming services, or at least ballpark numbers. Use these years to begin building teens’ awareness of household costs. One approach is to “invoice” them monthly for their portion of the cellphone bill and/or Wi-Fi, not necessarily with the expectation that they pay it, but as a transparency exercise.

Encourage long-term planning

If your teen is saving for a larger purchase like a car, a trip, or even future college expenses, use it as an opportunity to teach goal-based saving. Help them set benchmarks and track their progress and explain how saving now will make the big spending easier later on.

Keep the conversation going

Money talk should be ongoing, not a one-time lecture. Keep things conversational and light; it should be a learning exercise, not a stressor. Ask them what they’d do differently with their last paycheck, for example, or what they’d change next time. Let them make small financial mistakes now when the stakes are low, and they’ll be better prepared for when it really starts to matter.

Setting Up Your Teen for a Lifetime of Smart Financial Decisions

Helping your child build financial confidence during their teen years will pay dividends for decades. When they understand the basics; how to budget, how interest works, and what things really cost, they step into adulthood more prepared, more empowered, and less likely to fall into common financial traps. Building financial trust with kids is the first step to a lifetime of healthy money habits.