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Money Management for Teens

With age comes responsibility, and with responsibility, comes managing money.

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You’re not alone if managing your money as a teenager has you swirling with frustration and anxiety. In fact, Deloitte Millennial and Gen Z’s Mental Health Survey shows money at the top of most young peoples’ Worry List. The survey found that 46% of Gen Z were highly stressed about their current and future finances.

Age aside, financial woes can get the best of any living soul.

And as today’s elevated inflation rears its ugly head, many more people are significantly affected than ever before. 

During these times – just like any other – our means of managing money must involve a strategic plan of action to survive through the thickest of storms. And even with no storm in sight, staying prepared by taking on smart ways of managing your money and keeping it organized is the safest game plan now and later on in life. 

So how can you get started with turning your financial woes into financial “grows”?

We will uncover reasons why staying organized with your money and managing it properly as a teen is important, how to smartly manage it, and how to ask your parents for help. Bonus apps and tools to help you manage your money will be tagged on for you to use, and handy money management word definitions and book recommendations.

Why Staying Organized with Your Money and Managing it Properly as a Teen is Important

Do you ever get the impression that your parents want to put you on a money lockdown and dictate when and how you spend it?

What about when your closest friend that happens to be highly money-conscious starts to suddenly throw in their two cents every time you go out together about how you should chill out with pointless buying?

Do a quick reflection on this scenario: You check your pockets and backpack for spare cash, and there’s zero. You check your bank account that you hadn’t been keeping tabs on for over a month now, realizing it’s empty. Frantically, you start to raid your room and house for any sign of coins or dollar bills that you can gather, but find none. You even go down your contact list of friends to ask that you think would lend you the money, but to no avail, and when you don’t have the luck of coming across any money at all, you start to panic.

The first thoughts to enter your mind are: 

[“… I’ll no longer be able to cover the costs of the college admission application fees that I already agreed to pay for…now the deadline is approaching… there’s no time to come up with the money anymore…my parents will never think that I’m responsible with my own money…”]

At that moment, you realize the spending escapades were the cause of the financial bind you found yourself in, and you immediately start to become full of regret. Consequently, you end up at the mercy of your parents expressing their disappointment and complaints…

Like, “From now on…”, while also throwing in that phrase that starts with, “I told you so.”

Don’t think you are alone on this. 

Many teenagers go through the same scenarios before realizing it’s time to take a step back from spending and to get financially organized before more unwanted consequences emerge.

Here are reasons why you’d want to shun the narrative of your parents giving you long drawn out money critiques that only end up haunting you in the end, and why getting organized with managing your money provides you with personal benefits as a teen and future adult:

  • Personal finance + responsibility = freedom – The more responsible you are with your money, the better positioned you are for having your parents’ trust and assurance today and your own financial self-confidence tomorrow.
  • Avoids/Minimizes Money Losses and Theft – When you’re careful and attentive, the chances of you being a perfect target to someone else’s ploy or losing cash on a whim isn’t likely. The best prevention of money loss is simply gaining control in managing it properly.
  • Developing Admirable Money Habits – Won’t your frugal friend be proud of you? And your parents? Well, in front of you, they’d happily cheer you on for adopting good money habits. Behind your back, they’d secretly go berserk, knowing that they were finally able to get through to you.
  • Maximize Your Savings – Who doesn’t want to be that financial wizardous teenager that manages to save a million dollars before their 21st birthday? (The Wizard teen is actually an immortal 89-year-old who’d been saving $48 every week since they were 18. You do the math.)

How to Smartly Manage Your Money as a Teenager

Wondering how to get the ball rolling on managing your money? Here’s a step-by-step guide on how to start the process and end it with flying colors:

  1. Establishing Income – Do you currently have a part-time job that pays you a bi-weekly wage or salary? Or do your parents set you up with a weekly allowance due to your involvement in sports or high school activities? However you have money coming in, keep track of the amount and frequency to effectively establish your estimated income. This is the first step in being able to manage your money.
  2. Budget, Budget, and more Budget – Budgeting can get you thinking a little more intently about how you spend, lose, or give money away. For one, spending money is inevitable, but to an extent. Giving it away is a great way to pay it forward and make donations to those in need. But how do you know how much you should give away or spend over some time? With a budget, you’ll know your limits so that your finances stay in check and in your control.
  3. Know Your Expenses Outright – Get a pen and paper for this one. Are you responsible for footing the phone bill? School lunch? Extracurriculars? Do you pay membership fees in teen groups or at your local gym? Or do you have a shoe obsession that you don’t compromise where you buy yet a different pair every week? If so, prepare to make your money management efforts null and void. Oh, wait, did you say monthly shoe purchasing instead? Think that’s any better?

…you know something? It’s to be expected.

How to Ask Your Parents to Help you Manage Your Money

If parents are willing to provide you with food and shelter and a quality lifestyle, it’s not for the rest of your life. 

They are preparing you to reach a phase in your own life where you can make confident financial decisions on your own that will allow you all of the above and more. But before getting to that point, they have the experience, know-how, and resources to support you through this pre-phase in starting your money management journey.

Here’s how you can approach your parents for help:

  • Recognize their ability to be your guide – let them showcase what they know best while you sit back and take notes. Showing that you are ready and willing to learn from them will encourage them further in helping you.
  • Be upfront and open up about your needs, expectations, and goals – Let them know exactly what you want. Do you want to be able to save more money? Increase your income to have more flexibility with spending while being up-to-date on paying bills? Your parents are the ideal people you’d want to talk to to help you achieve those goals. 
  • Show that you’re doing your part – A great way to skip ahead in your coaxing tactics is to back up your words with actions. Take a week of reducing your secondary expenses and volunteer to help foot the bill on an important expense. Your parents wouldn’t be expecting your generous offer, nor would they have thought that you’d have the money at all. No offense to you.

Apps and Tools to Help you Manage Your Money

Now that you’ve got your parents on standby to help you start to manage your money, here are some great sources that are guaranteed to make the process smoother and effective:

  • Greenlight – this savvy banking and investing app with a debit card attached is a great way for you to stay connected to your money. With the help of their debit card, you get a seamless way of making purchases and achieving savings goals. They also offer customized cards with a photo of your choice – selfies included!
  • FamZoo – as both a prepaid card and a finance app, FamZoo offers expert help and financial advice, direct deposit for trends, instant card-to-card transfers, and more. 
  • Acorns – a no-frills, user-friendly app that is hands-on with teaching you how to save. For every purchase made through a linked credit or debit card, Acorn rounds off the purchase total to the nearest dollar and adds it directly into your savings account. Note that this isn’t free, but you can find a family plan for as little as $3/month.
  • Mint – this budgeting tool/app is perfect for monitoring your personal finance. Create a savings goal that helps you break down your income and expenses It is free to download and to sign up.

Money Management Definitions

  • Money management: The processes of budgeting, saving, investing, and spending money.
  • Budget: A plan for how you’re going to use your money.
  • Credit card: Allows you to buy something without first paying for it
  • Debit Card: A plastic card that is used as a payment method to cash when buying things
  • Mobile Banking: The process of using banking products and services through a mobile device.
  • Direct Deposit: An electronic transaction that transfers money directly from a payer’s account to a recipient’s account.
  • Inflation: The rate at which the cost of goods and services increases over a period of time.

Book Recommendations

If you learned anything from this article, it should be that learning doesn’t end after reading a single informational blog article on finance. Check out our big library of money books for teenagers for more great reads!

Continuous learning is a great way to stay educated and increase your overall knowledge of money. The following books will serve as a great reinforcer and should keep you on top of your financial wealth-building strategies:

Become A Teen Boss – This money-maker training book is for teens who want to make money on their own terms and do so in the comfort of their own electronic devices!

Foundations in Personal Finance: High School Edition for Homeschool Student – This award-winning, curriculum-based student text is perfect for homeschoolers and high schoolers alike. 

Manage Your Money Like a Grownup – This simple yet informative read aims to get younger readers thinking about the basics of money that lay a solid foundation for their financial education. The book also introduces investing, compound interest, taxes, and more!

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About the Author

Christina Ezeagwuna

Christina is a professional writer with 7+ years in entrepreneurship, opening a rental baby furniture business in 2016 that she still runs today. Christina is a mom of three budding, financially savvy kids and works as a content manager for the Hispanic Alliance for Career Enhancement.

Last updated on: July 18, 2022