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How to Talk Money With Children - Part 3

How to Talk Money With Children - Part 3

(Reading time: 3 - 6 minutes)

Our last in the series of helpful tips on talking money with the 3 age groups - Children 4-8, Tweens 9-12 and Teens 13-18.

Part 3: Children (13-18)

Australian parents have concerns about how their children will navigate their financial future. More than two in five (45%) are concerned their children will lack the skills they need tobe financially successful once they become independent.
FPA Share the Dream Report 2018

Raising financially savvy teenagers

Clinical child psychologist, Emma Spencer explains how to teach teens the value of work and money.



Encourage your teen to get a part-time job. A part-time job is a fantastic skills-builder. If you think they’re ready, then encourage them to start working. There’s so much to be learnt from a part-time job aside from money. Building connections, learning responsibility, customer service skills and manners are important stepping stones to adulthood.


Set expectations for household contributions. It is getting much harder for young people to leave home because of the high cost of living, so I don’t expect my children to contribute money to the household while they’re in school. Once they are working, if they are still at home, that’s the time to discuss board, contribution to groceries and so on.

I advise against giving your teenager a free ride, because that’s not how the world works.


Warn teens against buying things on credit. As a teen, I would put things on layby to slowly pay them off, so I understood the value of what I was buying. Now, teens use AfterPay without understanding how the payments work. Speak to your children about the pitfalls of buy-now-pay-later shopping. Instead, encourage them to save for what they need, and not to go into debt for something they want.


Encourage your teen not to spend all their money on treats and socialising. Unless they are going out for a planned social occasion, I personally think that buying snacks out is not the best use of money. Especially if your teen still lives at home, and you are providing meals for them, then encourage them to eat at home and pack their lunch as a good way to save. Plus, you can have great conversations over shared meals.


Let them make mistakes. As parents, you can encourage sensible decisions based on wants and needs, but apart from that, teenagers should learn for themselves. If your child ends up in debt, as a parent you would naturally want to help them out. But experience is a great teacher.


How to teach your teen to plan for their future

Teens love to spend whatever is in their pocket. Financial Planner and mother of two teenagers Fran Hughes CFP® explains how to make planning easy for teens.


Involve your teens in planning for family holidays. Ask them to help you do the research and get them involved in the saving and sacrificing needed to get there. Get the whole family together to make plans and discuss what sacrifices or trade-offs have to be made to achieve the goal. But, don’t forget to make it a cheerful experience, not a chore. You’re planning a holiday after all!


Create a weekly spending tracker for your teen to manage. Begin by giving them a small amount of money for lunch and entertainment, and consider increasing it as a reward after they’ve proven that they can manage the money sensibly.


Gradually add financial responsibilities to help your teen develop their financial management skills. Only a parent knows how much money their child should be responsible for. Until their mid-teens, my girls received $20 per week for jobs around the house.


Teach teens to save for the big things. When my girls ask for an $80 pair of shoes, I don’t just buy them. Instead, I ask, “Do you need them right now? Are you prepared go without today, or wait four weeks and save your weekly $20 allowance?” Giving them two choices allows them to weigh up their options and consider the value of money.


Stick to the principles of budgeting. Reward good habits, not bad. If they blow their budget, don’t lend a helping hand by giving extra money. Sure, they may get upset if they don’t have enough to go to the movies on the weekend. But the greatest learning is often found in failure, so allow your teen to stumble. They will learn from it.


Teach the power of saving early in life. The one money habit I want to pass onto everyone is “the two-thirds rule”. Always save one third of your earnings to reward your future self, and encourage living within your means using the other two thirds. The earlier your teens start saving the more interest they’ll earn, which can accumulate over time.


Help your children save with incentives — perhaps for every dollar they save, you can give them 20c interest to help boost their savings.


If you haven't read the full series or FPA Share the Dream Report, you can download them here.

Download the eBook - How to Talk Money with Children PDF

Download the full report on research into raising the Invisible Money Generation - FPA Share the Dream PDF


Need some help on how to guide your teens to be more money wise?

Why not book an appointment or give us a call and arrange to speak with one of our advisors, contact us on 02 9328 0876.

Article by - FPA and Money & Life |

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.