Teaching Teens About Money

The teenage years are filled with many milestones. With this guide, open conversations, and a little help from social media, parents and guardians can turn those moments into money lessons for the future.

Key Terms

Frequently Asked Questions

  • How can you start a budget as a beginner?

    An individual’s budget will vary depending on their lifestyle, spending habits, and net income. To start a budget, you need to take a deep dive into how you spend your money, which includes gathering all of your bills and pay stubs. When you have all of your bills and pay stubs, write down all monthly expenses. Then, write down your monthly income. Subtract the expenses from how much money you make. If the number is less than zero, you are spending more money than you make and it is time to reevaluate your spending and saving habits. A beginner can use a budgeting spreadsheet, calculator, or various applications to assist in the process.

  • What is a good age for a teen to get a credit card?

    By law, an individual can’t open their own credit card account until they are 18. However, you must be at least 21 years old to get a credit card in your own name without a co-signer. If you're under the age of 21, you must be able to demonstrate the ability to independently make the payments to get your own credit card. That being said, a teenager could get a credit card under the age of 18 if an adult names them the authorized user on their credit card. This means the teen will have a credit card with their own name on it, but the primary account holder is responsible for making payments. By giving your child access to a credit card early, they can build their credit history, learn how to use credit cards safely, and gain rewards. However, having a credit card is also a big responsibility, so be sure to weigh the pros and cons prior to authorizing your teen to use their first card.

  • How do I apply for a credit card?

    You can complete a credit card application in several ways: online, on a paper application, or on the phone. Applying for a credit card online is convenient and you can get a decision almost immediately. Be prepared with personal details like your date of birth and Social Security number; details on income and housing costs; and information on any authorized users you want to add to the account.

  • How do you save money as a teenager?

    The most effective way to save money as a teenager is to start small. With each allowance, summer job, or side hustle, it’s important for teens to pocket away a portion of the total and put it in savings. Most banks and credit unions require minors to open a savings account with a parent or guardian present, so in this case, the name of the guardian and the teen should both be on the account. If teens are hesitant about the idea of working, encourage them to consider a job in an area they are passionate about. For example, if your teen excels in English and enjoys the subject, perhaps they could consider tutoring younger children after school.

  • How do student loans work?

    A loan is money you borrow that must be paid back with interest. To receive student loans specifically, you must first apply for financial aid using the FAFSA. Depending on your personal and familial circumstances, you may be offered loans as part of your school’s financial aid offer. There are various types of student loans available, all of which have their own terms and conditions. These loans can come from many institutions, including the federal government in the case of federal student loans, as well as private sources such as a bank, financial institution, or nonprofit. Generally, federal student loans usually have more benefits than private student loans.

    To apply for federal student aid, you must first complete and submit the Free Application for Federal Student Aid (FAFSA) form. Private student loans, on the other hand, are issued by banks, credit unions, and other lenders based on your credit profile, so the application process will depend on the lender.

  • How long can you stay on your parents’ car insurance?

    In most cases, you can maintain coverage through your parents auto insurance policy indefinitely. However, some insurance companies and state insurance laws require you to get your own policy at a certain point. In Pennsylvania, for example, if you’re driving a car that is owned by your parents and their home is your primary residence, you can remain on the policy. Once you move out on your own, though, this may not fly with your insurance company. Before getting your own insurance policy, speak with your insurance provider about the specific terms and regulations.