Giving Teenagers Financial Responsibility

Financial responsibility isn’t something that tends to come naturally to most teenagers, but it is something that can be taught. Here we offer some ideas and insight into giving teenagers financial responsibility.

How often have you heard the words, ‘My teenager doesn’t understand the cost of X?’ or ‘I wish my teen would spend money more wisely.’ The chances are that words or thoughts around these themes will have passed through many a parents mind, as they fret and wish that their offspring would get a better grip on financial matters.

Parents can play an important role in helping their teens learn more about money and become more financially responsible, even though it can sometimes seem like hard work achieving this. One of the first stages is to encourage teens to do some paid work – be it getting a part time or Saturday job or earning money for doing jobs around the home or garden.

Earning money themselves through a spot of hard work, rather than having money dished out to them in the form of pocket-money, is an important learning curve in the development of financial responsibility. By working to earn money, it can help teenagers appreciate the value of money more (e.g. it takes four hours to earn the equivalent of the cost of a video game) and helps put them more in touch with the real world.

Working for money also gives teens some vital responsibility and, if they’re employed by someone else – rather than family members – they earn other key skills involved in first employment, such as time management, learning to work as a team and the personal responsibility of turning up on time.

Paying Their Way

One way of taking financial responsibility up a notch is to encourage your teens to pay their way. Rather than spending their hard earned cash on treats and fripperies, why not suggest they use it to pay for the things they’d otherwise expect you to fit the bill for?

For example, it might be that you son wants to upgrade to the latest phone, or wants to have more texts per month, but rather than automatically paying for it, you could suggest they pay for it. Having to learn to budget and save money, rather than spending it without giving it a second though, can give teenagers a valuable insight into both the real world and the ability to take financial responsibility.

If they’re saving up to pay for their own new mobile phone, they’ll hopefully take more pride in it when they reach their goal and, if they’re paying to get more texts or call allowances each month, they’ll hopefully realise that the money doesn’t grow on trees. Put simply, when they’re taking responsibility for their decisions, they should appreciate money more.

In the case of mobile phones, which seem to be the necessary gadget of every teenager these days, this doesn’t mean that you can’t help fund the basics, like the basic call plan; just that if they want the extras, then they have to learn to pay for it themselves.

The same principle could work for other luxuries, like downloading iTunes, buying CDs, buying clothes or video console games. Most parents can’t afford to give their teens everything they want, and it wouldn’t be good to do so, but they can help by teaching and passing on lessons in money management and financial responsibility. Although some teens may be reluctant to take up the prompts, or may shy away from doing so, in the long run it’s great for them if you do encourage them to learn to pay their way. Not only will you feel happier and less strapped for cash, but they'll thank you for the skills and knowledge in the long run!