Teaching your teenager responsibility in personal finance

By Jules Shiells [Sponsored Post].

Personal finance is not the most exciting topic for most teenagers. However, good personal finance skills can be instilled at a young age, and responsibility exercised during adolescence often persists into adulthood.

Ideally, you will have started practicing financial management with your children at the time of their first piggy bank. If not, there’s still time to teach good habits. Let’s take a look at some basics that you can run through with your teenagers without boring them to death.

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Earning Money to Manage

You can practise theoretical scenarios as much as you want, but until your teenager has money that is actually theirs to manage, they won’t fully learn to overcome temptation and see the big picture.

If your teenager isn’t old enough for their first job, there are plenty of tasks waiting to be done around the house. Offering an allowance gives your kids practice for when they one day have to manage a paycheck, and offering them routine work for a consistent payment teaches basic budgeting skills they can use later in life.

Encouraging them to save their allowance (rather than blowing it on a new pair of shoes or CD) will help them create lifelong habits, such as investing their future salary in long-term investments like shares on the stock exchange, money market accounts, or other types of investments.

Practise Thirds

An easy way to teach your teenager to save and practise moderation with their money is to use the rule of ‘thirds’. Teach them to put a third of their money into savings, a third into their funds for immediate spending, and another third to use for other people (gifts, donations to charity, and so on).

This is an amazingly simple technique that teaches budgeting without losing their interest. To make things as simple as possible, you may even wish to use three jars, labelled accordingly.

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Saving for Things They Want

The responsibility of having their own money to manage comes with the ability to have the things they want. Teach your teens that if they want to purchase a ‘big ticket’ item, they’ll have to plan ahead and set aside their money for it. If you use the ‘thirds’ technique with them, show them that they can save even faster by not spending their one third for that month and putting it instead towards savings.

These techniques are very simple, and will have your teens learning responsible savings quicker than they can say: “Mum, can I have $20?”


This post was brought to you by E*TRADE, one of Australia’s most respected online stock brokers and winner of multiple awards from AFR and Money magazine.




  1. My son has a piggy bank at home. I never realize that it is one way of practicing financial management. I’m glad I read your post. I learned a lot. Thanks for sharing a great content.

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