3 Lessons Every Teen Should Learn About Money (Before It’s Too Late)
3 Lessons Every Teen Should Learn About Money (Before It’s Too Late)
As parents, we all want to give our kids the tools to succeed in life—and maybe we don't always feel like we're the most equipped to handle every topic. One of the most important tools they’ll ever need is financial literacy. But the sad truth is, most teens enter adulthood knowing more about quadratic equations than budgeting, saving, or investing. That’s a recipe for stress, debt, and missed opportunities.
If you want to give your teen a head start on managing and growing their money responsibly, here are three essential lessons every teen should learn about money—lessons I’m teaching my own kids and that I believe every parent should prioritize.
1. Money Isn’t Just for Spending - It’s a Tool for Building Wealth - Knowing The Difference Will Change Your Life.
Let’s face it: most teens see money as a way to buy the things they want right now - and they always want something right...now! Sneakers, video games, fast food—money comes in, and it goes right back out. But here’s the truth I want my teen to understand: money isn’t just for spending, it’s a tool for building wealth.
Teaching this starts with helping them understand the power of saving and how even small amounts can grow over time. I use the example of compound interest (this is of course a general example and not a financial claim...)—if your teen invests $50 a month, every month, starting when they are 16, they could have earned around 150,000 by age 60 (assuming a modest 7% return).
What You Can Do:
Open a savings or investment account for your teen. I recommend tools like Greenlight, (that's my partner link with Greenlight that gets you a special discount) which makes it easy for kids to learn about saving, spending, and even investing in a safe, parent-monitored way.
Help them set financial goals that motivate them—whether it’s saving for a car, college, or even long-term investments.
2. Budgeting Is Freedom—Not a Chore
If I could teach every teen one simple truth about money, it’s this: budgeting doesn’t restrict your spending—it gives you freedom. When you know where your money is going, you’re in control, and that control opens up possibilities.
Start by introducing your teen to the concept of the 50/30/20 budget rule:
50% of income goes to needs (like saving for essentials).
30% goes to wants (yes, they can still have fun!).
20% goes to savings, generosity/charity, and investments.
Teaching them to track their spending and plan ahead helps them avoid the cycle of “spend now, regret later.”
What You Can Do:
Avoid an "allowance" and pay them for chores, but require them to track their spending and savings.
Use apps or tools like Greenlight to help them visually see where their money is going.
Make it fun—challenge them to save for something they want and match their savings to show the power of delayed gratification.
3. Every Dollar Has a Job: Earning, Spending, Saving, Giving, and Investing
One of the best lessons I’ve taught my teen is this: every dollar has a job. Money isn’t just for spending. It’s for earning, saving, giving, and investing, too. Teaching your teen to assign every dollar they earn or receive to a specific purpose builds intentionality and lifelong financial habits.
Here’s how I break it down:
Earning: Teens should learn that money isn't free or cheap—earning money builds responsibility. Encourage them to get a part-time job, start a small business, or earn money through chores.
Spending: Show them how to spend wisely by evaluating their wants and needs.
Saving: Teach them to save for short-term goals (like a new gadget) and long-term goals (like college or retirement).
Giving: Encourage them to give back to causes they care about, showing money can make a positive impact.
Investing: Yes, even teens can learn to invest! With tools like Greenlight, my teen has started buying and selling stocks with his own money—learning firsthand how investing works.
What You Can Do:
Set up different “buckets” for earning, saving, giving, and investing. Again, save yourself the trouble and check out Greenlight, it makes this easy by letting teens divide their money into categories.
Talk to your teen about what they value, and help them assign their dollars accordingly.
Ready to Help Your Teen Master Money?
If you’re ready to give your teen the financial head start they need, I invite you to join my Money School course. As part of Money School, you’ll not only get free access to my step-by-step guide for teaching your teen how to manage and grow their money, but you’ll also get a free trial of the Greenlight app.
This combo is the best tool for helping teens become financially responsible faster than the kids next door.
Don’t Wait—Get Started Today
The financial habits your teen builds now will follow them for the rest of their lives. Equip them with the tools and lessons they need to thrive as adults. Click here to join Money School today and get your free Greenlight trial!
