For Parents

How to Teach Your Teen the Value of Money

Money isn’t everything. But knowing the importance of a dollar is essential. Here’s how to get that lesson through to your teen.


Ah, the teenage years. Any parent knows that once their kid becomes a teenager, all bets are off. And chances are the last thing they’ll want to do is listen to you. But, even if they listen to you, some lessons can be tricky to get across. One such lesson is the value of a dollar, let alone the importance of budgeting.

 Few things are more crucial to life-long success than a robust knowledge of financial tools, tips, and strategies. Explaining that to a teenager more obsessed with friends, the idea of college freedom, etc., isn’t the easiest thing in the world. That’s why we’ve put together everything you need to know about teaching your kid the power of the dollar. They grow up in the blink of an eye so let’s jump right in!

The 5 Best Strategies to Teach Your Kid the Value of a Dollar

5: Let Them Fail

Don’t worry. Letting them fail isn’t as harsh as it sounds. We mean that making financial mistakes like over-drafting, buying overpriced items, losing money, etc., is part of the journey. Obviously, these are not parts that anyone should repeat frequently. But if you bail them out at the first sign of danger, it can cause them to take your help for granted. And unless you’re a multi-million dollar family, at some point, your kid will have to be able to take care of themself. Let them fail to teach the lesson of what could happen if they don’t stay on top of their finances. 

4: Debit Card

Getting your kid a debit card once they turn 13 is as simple as going into your financial institution and setting up a youth account. You’ll be able to monitor their spending, transfer money, and more. But more importantly, it gives them a taste of financial responsibility. And if they mismanage their money, you can point them toward their online banking’s money tracker. 

Practically, all banks and credit unions offer some form of it. Let them know they can find out exactly where they’re overspending and what to do about it. Debit cards and everything that comes with them put the responsibility in your kid’s hands, but you’ll still be able to step in when necessary. 

3: Faux Bills

Faux bills just mean assigning your kid fake monthly bills. This practice helps teach them the importance of budgeting and that not all of their money can be spent on just the things they like. If your kid makes $500 a month at their part-time job, then charge them $75 for rent. Or bill them $25 for AC in the summer months. The exact bill is your choice, but making sure they pay allows them to experience real-world applications for their funds. It’s also a good idea to save all the money you charge them and to give it to them when they move out so they can start their adult and college life with a safety net. 

2: Investing

There are a few select options to help teens get into investing. It can be done with apps like Fidelity or Greenlight. That said, there are other ways to invest beyond stock trading. Open up a money market account for your kid to teach them the value of interest and long-term gains. Or teach them about savings bonds to broaden their knowledge of financial tools. 

Another form of investing would be helping your kid start a small business. Getting started is easier than ever in the digital world. You can help them sell art on Etsy and other marketplaces if they’re artistically inclined. If they excel in school, then help them start a tutoring business. Earning money is one of the easiest ways to learn the value of a dollar. 

1: Financial Literacy Classes

You can find financial literacy classes online, at your local high school, college prep course, or your community library. They are a great option if, as a parent, you don’t feel entirely confident in your financial knowledge. Take the class with your teen and discuss what you’ve both learned. It’s an opportunity to bond and give them an advantage in life. Most financial literacy classes teach generalized knowledge as opposed to specific tools like investing, trading, etc. But with enough effort, you’ll find the right one for your teen. 

What Teenagers Should Do With Their Money

Most teens aren’t sure what to do with their money beyond spending it. Giving them a positive place to store their funds or helping them devise a plan can change that. Here are a few things they can put their money towards.


Saving for college is easily one of the smartest choices any teen can make. To help them, you can open a 529 savings plan and make them the beneficiary. A 529 plan is a savings account offered by the state for college. The money in it must go towards school costs, and only the beneficiary can make withdrawals. If a 529 plan isn’t possible for any reason, then there are other ways to save. You can put the money into long-term CDs to mature or high-yield savings accounts like money markets. Ideally, you’ll be able to help pay for school in combination with financial aid, scholarships, grants, etc. But having funds already set aside helps take the stress off you and your teen. Plus, the less debt, the better.


Not every teen goes straight to college after high school. Gap years are becoming increasingly popular, as is the idea of spending that year traveling. But we both know how expensive travel can be. Tickets, supplies, housing, souvenirs, etc., all add up. Talk with your teen and make a plan as to where they’re going, associated costs, and more. Then make a travel plan and save towards it. 


Under the same logic as travel, not every teen jumps into college life. And many may prefer to go directly into the workforce while they save up. The cheapest option is to let them live with you until they’re ready. But, if that’s not an option, they’ll have to pay rent somewhere. Find out where they want to move, the median price of housing, and make a budget so when they move out, they won’t have to stress over rent for a few months at least. 

Also, it’s not a bad idea to charge them rent if they decide to live at home. It’ll get them used to paying essential bills. And as mentioned above, you can always save the rent in a high-yield account and give it to them when they move out. 


There’s no question that having a car makes life easier. Even the most efficient public transportation runs late and is inconvenient to a lot of lifestyles. Ensuring your teen has the funds to purchase their first car can open doors. Imagine them missing out on a job opportunity because of a missed train. Or having a limited social life because they live too far from their hobbies. Finding the right car comes down to price, reliability, and safety. We suggest shopping for a mid-size sedan with moderate miles. For the best price, look for one that needs minor repairs, such as new tires, starters, brakes, and other easily fixable or affordable things. 

The Takeaway

The sky is the limit for teens who strongly understand money. And as a parent, it’s your duty to teach them or provide resources for them to learn about finance. Some teens may advance quicker than others so remember to stay patient. Don’t be afraid to quiz them about areas they’re confused about, and provide support as needed. In the end, their financial journey is their own responsibility, but with the tips and tricks outlined above, you can teach them the importance of financial stability.

If you want to give your teen some resources to read, send them a link to our Kids’ Money for Teens section and teen money management guide.

About the Author

Chadhurst Sharpe

Chadhurst Jainlett Sharpe spent over six years working as a personal finance banker. He's passionate about giving young minds the tools and resources they need to succeed with money.

Last updated on: July 8, 2024