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Teaching Teens about Financial Responsibility

August 20, 2014

As children make their way through adolescence, responsibilities increase, and in many cases these responsibilities bring new monetary obligations. Through getting their first job and earning their driver’s license, finance management concepts become more tangible. Your child’s teenage years are an ideal time to turn fundamental financial concepts into concrete financial habits that will follow them into adulthood.

An advantage to encouraging financially savvy decisions among this age group is that although their financial responsibilities are increasing, a safety net is still in place. Therefore, poor financial decisions are less detrimental. Before college loans, credit card payments and living expenses become monthly obligations, teens are able to earn, save and spend more freely. This is a benefit, but also a doorway to irresponsibility. It is important to solidify appropriate financial habits during this phase of life, because all too quickly adulthood will bring a new array of obstacles to overcome and financial matters to understand. Three of the best ways you can promote money-smart behaviors is to provide your teen with opportunities to make financial decisions, give them space to deal with the consequences of their choices and talk openly about real-life situations.

The more opportunities teens have to practice making financial decisions, the better. Include them in conversations about paying for college or financing car maintenance. Establish new expenses that they will need to address on their own, such as paying for birthday presents or movie theater tickets when they go out with friends. As teens decide how much money they would like to save and spend for their own needs, it is important that they also understand the importance of giving. Promote financial goodwill from a young age by having them allocate funds to go to a charity, local organization or place of worship. Depending on their allowance, job and age, reasonable parameters can be set where earning, spending, saving and giving can be practiced in everyday life.

As these responsibilities increase, they will begin to recognize that financial matters are complex and that there is not always an easy answer. Allowing teens to make decisions of their own and deal with the consequences will help them to gain experience that can be used to gauge future decisions. Of course, there are times when it is necessary for an adult to step in and help work through a financial matter, but giving them some space to experience trial and error is beneficial.

Before your teen had financial experiences of their own, your personal stories about earning money or saving up for something big may have gone in one ear and out the other. As they discover the complexities of financial decisions, these stories may now resonate with your teen. Do not be afraid to talk openly about both poor financial decisions and financial decisions that make you proud. The more information the better. Showing that you are willing to discuss your finances will encourage them to ask questions.

Taking time to nurture financially savvy behaviors is pivotal to future financial success. It may even be a chance for you to evaluate your own habits. It is never too late to turn your finances around, and it is never too early to give your teen opportunities to practice real-life skills. Providing your teen with learning opportunities and encouraging them to evaluate how they approach finances will help them develop positive financial habits.

Jim Oosterman is the Vice President of Melrose Bank. He can be reached by telephone at 781-665-2500, online at or on Facebook at

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