12 Things Every Teenager Needs To Know About Money

by David Ning · 12 comments

As you will notice, this post is part of the series of 12 Things Every Teenager Needs to Know About Money (And How to Teach Them).  Please visit the other 12 post in the series through the links at the end of this post.

Spend Money Based On Needs Not Wants

Separating needs from wants is not an easy challenge.  For example, you need clothes but how much should you spend?  You need to eat but there’s a difference between having another box of Kraft Mac & Cheese and dropping $25 for a decent steak at a nice restaurant.

Decisions, decisions.

Just grasping this concept for yourself is tough enough, but trying to teach it to a self-entitled teenager brings an entirely new set of obstacles.  I can hear it now…

“But Mom…I NEED the new iPod.  And I NEED it in neon pink.  And I…”

You get the idea.

Sure, teens like new stuff just like the rest of us, but how to help them make the separation between what they actually need and what they can live without is a challenge.  Here are some ideas to get that conversation started…

  • Don’t Be An ATM – How will a teenager ever learn the difference between a need and a want if they know you’ll always provide a steady stream of cash to them?  There’s no need to separate needs from wants when Daddy always hooks you up with a fresh $20 bill.  But once they start using their own money and get down to their final $20, they’ll quickly realize what they can live without.
  • Teach Them To Volunteer – Encourage your child to volunteer and see the lives of people who are less fortunate than they are.  When you volunteer, it really puts things in perspective and helps you realize that new pair of jeans that you just had to have may not be that big of a deal after all.
  • Evaluate Your Own Standard of Living – Time and time again, studies show that the biggest influence on teens isn’t their friends.  It’s not the media.  It’s not even The Jonas Brothers.  It’s their parents.  When you go to a restaurant and place your order, you better believe your teen notices how much your entrée costs.  When you make a trip to the grocery store, visit the mall, or go on vacation, what are you teaching your child about money?

This is a guest post from Grant Baldwin, the author of Reality Check, a book about helping students transition into the real world. His new website, BrokePiggy.com, answers questions from teenagers about personal finance, savings, and all things money.

Here are the links for everyone else’s individual posts. Please copy and paste this list into your post (it will be between the end of the post itself and the bio at the very end)…

Again, this is a guest post from Grant Baldwin, the author of Reality Check, a book about helping students transition into the real world. His new website, BrokePiggy.com, answers questions from teenagers about personal finance, savings, and all things money.

Btw, there's a pretty nifty tool that motivates your kids to do chores. It's called MyJobChart.com. With a free account, they can earn points for finishing jobs you assign them, good towards free merchandise. Give it a try. It's completely free!

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{ 12 comments… read them below or add one }

Stephanie PTY April 15, 2009 at 1:27 pm

That’s really interesting, how much teens are influenced by the spending their parents do. I have to say it seems true in my case – I’m as much of a gadget fiend as my mother is.

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Grant @ BrokePiggy.com April 15, 2009 at 1:59 pm

Thanks for your involvement in this series David.

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Chiko777 April 16, 2009 at 6:00 am

Another things teenagers should learn is how to start investing in the stock market, not just to make money but because it teaches them a lot about finances. I started investing in the stock market at the age of 13, and it has really help me.

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Person October 20, 2010 at 9:10 am

Wow. 13? Really?

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Dr. Sanford Aranoff April 16, 2009 at 6:14 am

In order to teach, we have to understand how students and children think, and build from there. See “Teaching and Helping Students Think and Do Better” on amazon.

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Blake@youngdough.com April 17, 2009 at 9:11 am

@ Chiko- that’s pretty darn impressive. I thought I got an early start when I purchased my first shares at age 17, but 13 is incredible. I bet you’re light-years ahead of your peers thanks to that head-start.

I’m still in college so I obviously don’t have any teenagers of my own, but I do have a 15 year old sister who drives me nuts with her mindset towards money. I do my best to break her sense of entitlement and consuming based entirely on wants, but largely to no avail. I’m afraid she’s going to have a tough, tough wake-up call.

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Meaghan April 24, 2009 at 5:17 pm

This is good advice. It is never too early to teach your children about finances. In fact, I would start before they are teenagers.

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Kiana Spevak March 4, 2011 at 2:21 am

Excellent post. I like the way you expose your writing talent. Keep up good work.

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Bubbles April 25, 2011 at 7:33 pm

Ok lemme clear things up for ya, since i happen to b a teen myself. I mean we just always want the new clothes. Wet seal, A&F, Pink– it just keeps going. We like electronics and cant part with our cell phones. Lol sometimes its hard keeping up with all the new stuff.

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Ryan November 19, 2012 at 3:06 pm

And your point is???

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Juan July 14, 2011 at 1:32 pm

I think another good thing to remember is that teenagers need to be able to recognize absesive levels of consumerism. Stopping them from using excessive amount of credit is good and necessary but the core issue is that they need to learn self control (which isn’t always dependent upon monetary consumption).

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Rita P June 21, 2013 at 2:42 pm

Buying expensive stuffs just to show other friends is quite common among teenagers. Anything bought for yourself which adds value to you is worth and anything bought to show off is waste of money

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