Finance for Your Tweens/Teens

This article is provided for informational purposes only and should not be construed as legal or investment advice. Always consult with a professional financial or investment advisor before making investment decisions.

As parents, we want our children to live happy, successful lives. And because money is so important in our modern world, it’s vital that children grow up with at least basic financial knowledge. 

Because financial literacy concepts are not always taught in schools, it’s often up to parents to teach kids about money. 

Children learn best through a combination of information and first-hand experience — and the same is true with money. This is why things like providing an allowance to young children or encouraging your teen to get a part-time job are so important: Children will learn best by gaining real-world experience with money. 

In this guide, we’ll focus specifically on the “tween” and teenage categories — or roughly ages 10 through 17. Here’s what parents should know about finance for tweens and teens. 

Finance for tweens

Tweenagers or “tweens” are those ages 10 through 13. For this age category, money is starting to play a larger role in their lives, but they are unlikely to be working yet. Here are key factors for tween finance. 

Setting up an allowance

If you aren’t yet giving your child an allowance, now is the time to start. An allowance is simply a small amount of money that parents give children each week. You can start small — just $5 or $10 a week is plenty for a tween. 

An allowance offers children first-hand experience with managing their money, balancing spending vs. saving, and more. For most tweens, an allowance will be the primary source of income and learning opportunities. 

Spending money wisely

Now is the time to teach your tweens about spending money wisely, avoiding impulse spending, and learning the value of money. 

Introducing concepts like spending vs. saving can help children grasp the tradeoffs involved in every spending decision they make. It’s wise for parents to encourage children to choose a larger purchase that they would like to make, and set a weekly savings goal in order to save up for it over time. To incentivize saving, parents could also sweeten the pot — by kicking in the final $50 if the child reaches $100 in savings, for example. 

Introducing charitable giving

Parents should also start to introduce the concept of giving to charity — or even just leaving tips at restaurants. Children should learn firsthand that money shouldn’t be solely used for their own wants and needs. Money has the power to benefit others, and children should be encouraged to think about their spending decisions with this perspective in mind. 

Small jobs

Many ways for teens to make money, like part-time jobs, will be off-limits to tweens due to age requirements. However, that doesn’t mean that tweens can’t start working odd jobs around the neighborhood. 

Opportunities like dog walking, pet sitting, and lawn mowing are common ways for kids to make money. Parents should provide a helping hand in finding the work, but allow children to take on the responsibility themselves. 

Finance for teens

In the teen years, money becomes much more tangible — and important. Parents should start introducing more topics, including ways for teens to make money, plus logistics like paying taxes and setting up a bank account. 

Making money

At this point, teens should find a way to start making their own income, outside of an allowance. Some ways for teens to make money include summer jobs, part-time jobs during the school year, or odd jobs like mowing lawns and babysitting.

Setting up a bank account

Teens should also open their first bank account with a local bank or credit union. Most banks have dedicated “teen checking” accounts, which typically have no monthly fees and low or no balance minimums. 

Ideally, teens should have both a checking and savings account that they can transfer money between, to manage spending and to save for future purchases or experiences. 

Preparing for college

Parents and teens should also start to think about college financial planning options. Teens should utilize all the ways to pay for college, including applying for scholarships and financial aid. But they should also start setting aside some cash savings to help pay for living expenses and activities while in college. 

Budgeting

The teen years are a good time to learn basic budgeting strategies. Teens who have a job will have to learn how to budget their paychecks to last between pay periods. Parents can help teens build their first budget, or allow them to learn on their own. 

Tax basics

Once teens start working, they will have to start filing taxes. Fortunately, their tax returns should be relatively simple. Most teens can use free tax filing software from providers like TurboTax, H&R Block, or Credit Karma. Even with software, though, first-time tax filing can be intimidating. Parents can help by providing guidance for getting through that first tax filing season. 

Final thoughts

The tween and teen years are when children start to be exposed more to the “real world.” This includes learning about managing their money. And the more they get a handle on their finances, the better prepared they will be for their future as adults. 

Parents can provide helpful advice and guidance, but should try not to be overbearing. It’s wise to let kids make their own (minor) mistakes and learn their own lessons when it comes to money.

Finally, remember that children also learn by observing. As a parent, setting a good example for your children can help them pick up good financial habits. 

If you need to brush up on your own financial skills, the Tally blog is a great place to start. It covers budgeting, taxes, debt payoff, investing and more. 

Tally† is an app that helps qualifying Americans consolidate credit card debt from multiple cards into a single line of credit. For many, this can help save on interest expenses. 

Learn how Tally works. 

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