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Money Management for Teens: 7 Tips from Financial Experts

Financial experts give their actionable advice on how to talk to your teen about budgeting, spending, and smart savings strategies.

It’s easy in hindsight to see a better path. That could explain why, according to a Mydoh survey, more than two-thirds (68%) of Canadian parents wished their parents taught them more about how to manage money. In hindsight, a few more lessons while we were kids could mean more insight as parents, as we try and teach our own kids the daunting task of financial literacy. Don’t worry, there’s hope!

We talked to some money experts for a few tips on how parents can begin and continue to teach their teens good money habits. The great news is that everyone agrees: Teaching financial literacy and learning smart money habits doesn’t have to be a burden or boring.

To learn more about how to talk to your teen about budgeting, money and smart spending, here are seven key tips from the experts.

Cassidy Horton Headshot
Cassidy Horton
Banking Writer

1. Choose a budgeting plan that works for your teen

Your teen has lots of options when it comes to creating a budget. Some obvious choices are using a spreadsheet or budgeting app to track expenses. But if you want an all-in-one account that will teach them how to earn, spend, and save wisely, consider a prepaid card.

One of the most popular prepaid cards for teens is the Mydoh Smart Cash Card. Through a partnership with RBC and Visa, it offers a similar experience to a standard bank account with a few extra perks. The Mydoh app can also be used as a chore tracker, where parents can assign and pay their children for chores. Your teen can then use the Visa Debit card to make real-world purchases and conveniently learn the connection between earning, saving, responsible spending, budgeting and digital banking. You can sign up for this Mydoh account and have up to 5 teens added to one shared account for a low monthly fee of $0.

Walo CEO Rim Charkani
Rim Charkani
Co-founder, CEO

2. Making mistakes is a big part of experiential learning

It’s important to make the distinction between theory and practice or textbook versus experiential learning. We tend to forget how important experiential learning is in shaping our behaviours. We can’t become financially literate just by reading about money tools and financial concepts. Financial literacy comes from practical experience — and that includes learning from mistakes.

Why prompting money mistakes in children builds financial literacy

We tend to fear mistakes because we know from our experience that it can be costly. But kids need stepping stones. We can’t learn how to ride a bike without falling. It’s the same with learning how to manage money.

At 13 years of age, money mistakes are so much smaller, but the lessons are incredibly valuable.When you’re young, those errors aren’t catastrophic, plus they offer teachable moments. If we focus on practical, experiential learning, we can help our kids build their money muscles.

Picture not described
Libby Magliolo
MBA from Southern Methodist University, Finance & Marketing

3. Learn how compound interest works

The advice I would give to a teen is to learn how compound interest works, because it underlies every other major financial concept they’ll need to learn down the road.

When learning about saving, investing and retirement, teens need to learn that compound interest is a powerful force that can work for them — especially if they start saving early. On the other hand, compound interest will work against them in the case of credit card or other debt.

Learning about compound interest is a great way to understand that financial decisions can have long-lasting impacts and that teens would rather have compound interest working for them rather than against them.

At what age should young people learn to balance a chequebook?

Junior high is a great time to introduce the concept of expense tracking. Teens are mature enough to understand the concepts, and will hopefully learn good habits before they start driving and have a bit more independence. These days, teens don’t need to learn to “balance a chequebook” in the traditional sense. Rather, they need to learn how to track their expenses, understand how to check a bank balance and understand that their money is finite.

Mydoh Chief Marketing Officer Angelique De Montbrun
Angelique de Montbrun
Chief Marketing Officer

4. Identify your emotional relationship with money

In general, Canadians have a high financial literary rate. But financial literacy isn’t one skill and learning to be financially literate and to manage money takes time, practice and awareness. Our emotional relationship with money is an overlooked but critical factor in our individual financial success. Not only does it influence our mental health, but money matters are a leading source of conflict in our relationships with others.

Why it’s important to talk about money

It’s not surprising. Talking about money is hard — and the money topic has been taboo for many earlier generations. But we need to start talking about money. Talking about money helps to remove the stigma and allows us to move beyond shame. Having these conversations during our children’s formative years not only helps break the shame silence, but instills a belief that lessons are inevitable and just part of learning financial literacy.

Since building an open dialogue around money is important, parents can start by asking questions. Ask your children how they feel about what they spend, why they buy and what they want. Ask them how that purchase makes them feel and to reflect on whether or not they’d make the same decision next time. Helping kids appreciate that feelings and money are linked helps them develop a healthy relationship with money.

Romana King Headshot
Romana King
Award-winning author | Personal finance expert

5. Bring your teen into money discussions

As a parent, it’s crucial to engage your teens in money conversations. Financial mistakes are usually made early in life and some of these decisions can have a big impact on your child’s future economic circumstances.

Talk to your teen about how and what they spend money on — and discuss your own financial decision-making with them. Getting them to make smart decisions all the time, isn’t the goal; the goal is to encourage your teen to ask money-related questions whenever they come up. Invite them to discuss household finances; ask them how to spend grocery money; talk to them about family vacations.

The idea is to nurture curiosity and a genuine desire to learn and expand their knowledge when it comes to handling money. Do this and their ability to ask for help — and avoid potentially crippling mistakes in the future — increases exponentially.

Jonathan Kellert headshot
Jonathan Kellert
Sales Manager at Primerica
Financial coach for over 10 years

6. Review your previous month’s financial status

Look at the money that you made and where it ended up. Ask yourself if you executed on your game plan, and if not, what can you do this month to stick to it. This evaluation will probably only take 20 minutes, but can get you thinking the right way about money and prepare you for adulting.

Where are teens wasting the most money?

I don’t believe teens really waste their money any differently than anybody older than them. The only reason they buy something they don’t need is because their money doesn’t have a specific job. If you don’t give each dollar a specific responsibility, it will quickly leave you. However, if you are diligent with your money and give each dollar a job when you splurge you aren’t really wasting anything.

Alexa Serrano headshot
Alexa Serrano
Banking Editor

7. Save at least 10% to 20% of your money — and start early

Whether your teen has a job or earns money through birthdays or an allowance, they’ll want to start saving at least 10% to 20% of their money. So if they earn an allowance of $15 a week, they should at least save $1.60 to $3.20 each week. To put it into perspective, if they save $3.20 every week, your teen would have saved $12.80 by the end of the month. And in one year, they would have saved about $153.60.

If you’re not going to open a savings account for your teen and opt for a piggy bank instead, make sure your child has more than one piggy bank. If you keep one piggy bank, you’re not teaching your teen the concept of keeping their spending and savings separate. So instead, give your teen two piggy banks. One for spending and the other for saving. And if you want your teen to donate, you can get a third jar for giving.

How much money should teens have save by age 18?

There’s no set amount of money your teen should have saved by age 18 because there’s no guarantee they’ll work in high school. Some teens may work regular part-time jobs, but others may only work during the summer. Others may not work at all if extracurricular activities take up too much of their time.

That said, the earlier your teen starts saving the better. Encourage them to save 10 to 20% of all the money they receive — whether that’s through a paycheque, birthday money or an allowance. This will help them get them in the habit of saving, which will put them one step ahead of the rest when they get their first full-time job.

Use a bank account as a starting point

One good way to get your teen to talk about money is to set up Interac e-Transfers to a bank account that they own and operate. To help, talk to them about bank fees and discuss the different options in the market. While perks and rewards can be enticing it can’t compete with the sinking feeling of knowing your bank balance is being depleted due to high bank fees. Use the Finder guide on the best bank accounts for teens as a place to start the discussion. Help them make their own decisions on what they consider to be the best banking option for their needs. Then send them e-Transfers or ask them to deposit money into their account. Just the habit of checking their bank balance can help open the door to potential money discussions. Eventually, you may help them appreciate that a no-monthly-fee bank account is worth more than the promise of merchant discounts.

Bottom Line

Money is a finite resource so having a clear grasp of how to create a budget for teenagers can help prepare them for a more prosperous future. Take the time to understand what level of financial literacy your teen currently has to better assist them in growing their knowledge.

Sharing these seven tips with your teen may help them avoid common financial mistakes — such as living beyond their means, going into debt and waiting until later in life to save. If you’re looking for an all-in-one account to teach them the importance of saving, spending and giving, check out these popular prepaid cards for teens or the top debit cards for kids.

This article originally appeared on and was syndicated by

About the Author

Romana King is the Canada Group Editor at Finder and a personal finance expert. As an award-winning personal finance writer and real estate expert, she has spent almost two decades helping Canadians make smarter money management decisions. Her first book, House Poor No More: 9 Steps That Grow the Value of Your Home and Net Worth, launched in November 2021, continues to be an Amazon bestseller and won the Excellence in Financial Journalism Book Award in 2022.

About Finder

Finder is a personal finance comparison site with a mission to help Canadians save, invest, spend wisely and grow their wealth. Each month, Finder provides half a million Canadians – and more than five million globally – with independent and trustworthy financial information. Our goal is to help people make better financial decisions by providing objective, comparative insight on thousands of products and services.

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