Teaching Teenagers the Value of Money

Teenagers seem to have an endless need for money. Many of them also have a hard time distinguishing between needs and wants. When my son got a summer job at a local fast food restaurant, I thought it was great. I figured he would have some spending money and gas money.

Yet it seemed his was spending his paycheck faster than he earned it. He was borrowing money from me for gas. I also found out he was asking his younger brother for money to get him from one payday to the next. I found this very hard to understand for a teenager with no bills – making $450 every two weeks!

I figured it was time to sit him down and teach him the value of money. I certainly didn’t want to think about him out there on his own in a year or two with the same passive thoughts about money. I chose a time when we were both able to focus on the issue, and explained my concerns.

I had my son explain to me what he thought were wants and needs. To him, needs were new sunglasses, taking his girlfriend to the movie, etc. I quickly explained to him those were all wants and not needs or necessities.

I explained to my son that when he got his next paycheck, he would pay me back for the money he borrowed and his brother. I told him it was no longer going to be an option to borrow money to get by.

When he got paid, I had him take 10% of it and put it into an envelope for savings. He wasn’t happy with it, but I wanted him to get into that habit. I had the thought he should save more than that, but baby steps is what we were doing right now.

I also gave him an envelope to put $40 in it for gas money to last him for two weeks. He said that he usually spends more than that, going back and forth here and there. So I made him put another $20 in that envelope.

We then talked about what he had planned for the month. For each item, we put money into an envelope. For example dinner and a movie with his girlfriend that following weekend. He was also going camping with friends for a few days and needed to buy a couple of things.

What he saw before him was how much money he had left to work with. It was about $70 which isn’t bad for things for a teenager for 2 weeks. We also went over what he often spends his money on. We identified the $8 or so he was spending a day on fast food to eat with friends was a waste of money.

Now he has money to get from one payday to the next. He understands that he doesn’t have to rush out and spend every cent as soon as he earns it. We still have a long way to go, but it is a step in the right direction!