This guide will show you practical ways to teach your teenager essential money skills. You'll learn how to give them financial responsibility, set a good example, and help them develop good money habits.
Give them control of their own money
The best way for teenagers to learn about money is to handle it themselves.
When they have their own budget to manage, they'll quickly learn that money runs out and needs to be spent carefully.
Start with pocket money
Even a small amount of regular pocket money is better than giving them money whenever they ask for it.
Research shows that teenagers who get a fixed amount weekly or monthly are much better at tracking their spending than those who get money randomly.
The amount of pocket money you give depends on your teenager’s age and responsibilities. But what matters the most is that it’s regular and predictable. This way, they can practise budgeting and planning as they get older.of pocket money you give depends on your teenager’s age and responsibilities. But what matters the most is that it’s regular and predictable. This way, they can practise budgeting and planning as they get older.
Make them earn it
Consider giving your teenager small jobs to earn all or part of their pocket money. This prepares them for having a real job later. They could do:
- household chores
- walk dogs for neighbours
- clean cars
- help with a paper round
- babysitting
- odd jobs for people you trust.
Teach them to budget
Help your teenager understand how budgeting works by creating their own budget for something they want to save for.
This could be new clothes, the latest phone, or even managing their weekly school lunch money (since most teens use cards or fingerprints to pay and need to budget how much to top up each week).
Choose a savings goal
Start by helping them work out how much their goal costs and when they want to achieve it.
Track their money coming in
Then show them how to track their income (from jobs, pocket money, or birthday money) and plan how much they can save each week or month.
Plan their savings
Calculate how much they need to save each week or month to reach their goal. Help them decide what they can realistically put aside.
You can also share some of your own financial responsibilities to help them understand.
Show them your income and explain what you spend money on, like bills, food shopping, and things for them like school trips.
Try budgeting together
For one week, let them help you manage the household budget with your guidance.
At the end of the week, talk about how it went. Ask them what surprised them and what they found difficult.
Simple budgeting methods
- Banking app budgeting tools: This can help automatically categorise their spending so they can see where their money goes each month and lets them set spending limits that send alerts when you're getting close to your budget.
- Set a savings goal: Help them choose something they really want to save for and work towards that target together.
- Three jars method: When they get their pocket money, help them split it between three jars - money for things they need (like school lunch), things they want (like cinema tickets), and savings for emergencies.
Let them face the consequences
If your teenager overspends their money, check in with them about what it means to not have money left for the rest of the week or month.
If the consequences are manageable, let them experience what it's like to have no money until their next pocket money day.
This helps them understand the real impact of their spending choices.
When teenagers have to handle the results of overspending themselves, they become much more aware of tracking their money.
Show your teenager good money habits and they’ll follow
Your teenager may be influenced by how you handle money, so it's helpful to set a good example.
If you save up for things you want, your teenager might pick up on this approach too.
When you use credit cards, you could talk to your teenager about how much you can afford to pay back each month, and therefore how much you can safely borrow.
When there's something you want but can't afford, like a family holiday, talk to them about it.
Explain how much you need to save, what you might need to cut back on, and ask if they have any ideas to help.
Budget planner
To help you manage your money, try our free and easy-to-use Budget planner.
Be honest about your mistakes
You don't need to be perfect with money to help your teenager learn.
If you've made financial mistakes, share them.
Explain what happened, how it affected you and your family, and what you learned.
This can be a powerful way to show them why good money management matters.
Help them manage their first wage
Getting a job is a big step towards financial independence.
Anyone over 13 can get a part-time job, and it's a great way for teenagers to learn about money in the real world.
Understanding payslips
When your teenager gets their first payslip, go through it with them. Make sure they understand:
- what their hourly rate is
- the difference between gross pay (before deductions) and net pay (what they actually get)
- what National Insurance and tax deductions are
- how overtime affects their pay.
Let them read our guide Understanding your payslip and ask if it raises any questions for them
Saving from wages
Having a job means more money, which is a perfect opportunity to talk about saving.
Help them set up a system where they automatically save a portion of each wage.
Having a job means more money, which is a perfect opportunity to talk about saving.
Help them set up a system where they automatically save a portion of each wage.
Many banking apps let you do this. Look for features like “automatic savings” or “round up” options that save spare change from purchases.
You could also help them set up a standing order to move a set amount (like £20 from every £100 they earn) into a separate savings account as soon as their wages come in. This way, they save without having to think about it each time.
There's no right amount to save. It depends on their expenses and goals. Help them think about:
- how much they need for essential expenses each week, like bus fares
- how much their social life costs
- whether they're saving for something specific like a car or university.
Find out more in our guide Savings accounts for children
Make saving automatic. The easiest way to save is to set up an automatic transfer from their current account to a savings account each time they get paid.
This way, they don't have to remember to do it, and they're less tempted to spend the money instead.
Review their savings plan every few months to make sure it's still working, especially if their income changes.
