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Budgeting For Teens: Teaching Teenagers About Money

It’s no secret that technology has changed a lot in our lives, including how we manage money. Now, with a few clicks on a smartphone, we can deposit checks, pay bills, check balances, even make purchases.

But while these tools have made our finances more convenient, there’s one thing that hasn’t changed: the importance of teaching teenagers to manage money.

Teens and Budgeting

It starts with a budget. When Daniel was in high school, his parents allotted him $100 a month for activities, like going to the movies or eating out. He tracked his spending using Excel and if he ran out of money, he was out of luck until the next month.

“It taught me the importance of staying within my budget and never spending more than I had,” Daniel explains. He used the same basic approach he’d learned in high school throughout college. “Now I’m in graduate school and I still track everything, from tuition to housing to food,” he adds.

In addition to budgeting, teenagers should also learn how to do banking and even use a credit card before going to college.

“As early as freshman year in high school kids should have their own accounts. Both checking and savings, and possibly a credit card with a very small limit to begin to teach them responsibility,” explains Chris Sands, vice president of Atlanta-based oXYgen Financial.

Teenagers should track deposits and debits in a register. There are apps and websites for doing this (see below). Whatever your teenager picks, even if it’s old-fashioned paper, make sure she keeps up with it.

Sands also suggests that 20 percent of the money your teenager deposits into her checking account—be it allowance, gifts or salary—be transferred to her savings account. Also, discuss the differences between debit and credit cards, explaining interest rates and fees, advises Sands.

“The main mistake is not talking about this stuff,” he stresses.

Kaneisha Brackens, a junior at the University of North Texas, wishes her parents had taught her more about how to manage money.

“My parents did not prepare me to manage my own money,” Brackens says. “Growing up, if I needed money all I had to do was ask. I would spend my money so frivolously.”

Brackens learned the hard way. “Now, I try to spend my money on things that I need rather than things that I want. But I wish that my parents would have sat me down and actually taught me how to manage money and even how to properly keep track of my spending.”

Teenagers and Money: There’s an App for that!

There are hundreds of apps for managing money and your teenager will use one or more of them eventually. Here’s a run down of some of the most popular.

Tracking spending

“It’s important to teach your teenagers how to track everything,” says oXYGen’s Sands. “And with today’s technology, this is easier than ever.” Sands’ favorite:, which offers tools for tracking finances on the computer and mobile devices. Its “Trends” feature even takes your data and creates charts to help you visualize where your money is going.


Most banks now offer apps that let users verify balances, deposit checks, and make payments from a phone. If you don’t already use these features, they can be huge time savers. Instead of going to an ATM, you can take a picture of the front and back of a check on your phone to deposit it directly into your account. And many banks will even let you send a payment to a friend via email, whether you’re on a phone or computer.

Making payments

Then there are apps like Venmo, which turn a simple payment into a social experience. Venmo is like Facebook for money. You can pay back a friend on your phone. You can even make the payment public, so friends can “like” or comment on the transaction. But there is a downside to Venmo and apps like it. When your teenager can transfer money with the tap of a finger, it may seem as if he’s just dealing with Monopoly money. There’s no cash trading hands or credit card to swipe. Just a click and it’s done, which, say the experts, is why teaching your teenager money management is so key.

Rebecca Borison is a writer in New York City.

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