Knowledge. Shared Blog

December 2019

Moving your Teen Toward Financial Independence

For parents seeking to raise financially responsible kids, the teen years bring new challenges. Many teens feel pressure from peers who equate social status with spending money on pricey clothes or expensive gadgets. Advertisers and social-media celebrities may only reinforce this impression.

The teen years are an important time to counter these pressures, because they’re the last few years you’ll have before your child becomes responsible for their own finances. Unfortunately, personal finance still isn’t widely taught at school: Only one in six students nationwide is required to take a personal finance course to graduate from high school.¹

If your child’s high school offers a personal finance elective, encourage your child to take it. Or if your school doesn’t offer such a course, encourage the administration to start one. Many organizations offer teachers free comprehensive financial education curricula, such as Banzai and the High School Financial Planning Program.

But good financial management starts at home. By the time your kid is a teenager, you’re hopefully giving them an allowance and showing them how to save it toward a goal. There are also many ways to model good financial behaviors for your teen, such as showing them how you compare prices or how your family saves for big expenses.

Several online tools can make financial education fun and motivating, because as every parent knows, no teen wants to hear a lecture.

Information and simulation

Several sites offer information that’s customized for teens. One such site, TheMint.org, is provided by Northwestern Mutual. Its “Tips for Teens” section offers advice and challenges on earning, saving, spending, investing and more. On TheMint.org, teens can learn how to decode their first real paycheck or the questions to ask themselves when they’re tempted to make an impulsive purchase.

Other sites offer games and simulations that make learning more exciting. One of the most popular is The Stock Market Game, produced by the Securities Industry and Financial Markets Association. Students built a $100,000 funny-money “portfolio” in a simulation that mirrors the real-world market. Studies have shown the game to increase performance in financial literacy and math. It’s taught at school, but kids can play it at home if their parents sign them up.

The arcade at Financial Entertainment contains free online and mobile games that improve financial capability. Check out “Bite Club,” where your teen can run a vampire nightclub; “Celebrity Calamity,” where they can manage the finances of irresponsible celebrities; and “Con ‘Em if You Can,” where they learn to spot fraudulent tactics by playing a fraudster themselves. The site is managed by the financial opportunity nonprofit Commonwealth.

The nonprofit organization Next Gen Personal Finance offers online games that simulate the challenges of paying for college, investing, managing credit and building a budget. Each game links to worksheets and full lessons that parents can access.

Money management

There are also apps that help teenagers learn to manage (real) money in a supervised environment. These tools also help parents manage the often-haphazard process of giving kids money and monitoring what they do with it.

With the FamZoo app, parents load debit cards with payments for their kids. Parents act as bankers for their kids’ accounts, approving requests and tracking spending. The app also helps users manage chore payments, build budgets and set saving goals. Parents can “loan” money to their kids and even give them “interest” on their savings, with the details handled by the app.

Another app, Greenlight, also facilitates money management through debit cards. Parents can use the app to track their child’s spending history and set limits on where and how the card may be used. Parents also get an instant notification when a child makes a purchase.

Raising a financially savvy kid can be a challenge, given many parents’ reluctance to talk about money. But tools and courses like these can help start the conversation and even move children toward mastery of their financial future.

Learn more about the basics of investing

¹ “NGPF Research Report Finds that Only 1 in 6 High School Students Nationwide Required to Take Personal Finance Course to Graduate,” Next Gen Personal Finance, https://www.ngpf.org/blog/personal-finance/ngpf-research-report-finds-that-only-1-in-6-high-school-students-nationwide-required-to-take-personal-finance-course-to-graduate/

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