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Encourage Your Teens to Spend Their Money Wisely This Summer

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Encourage Your Teens to Spend Their Money Wisely This Summer

Parents should commend their teenagers for getting a summer job or a paid internship. Although they probably aren’t being paid as much as they’d like, working for an hourly wage teaches teens the real value of money. Before spending $20 on a video game, they may just consider how much time it took them to earn that amount—probably two hours or more. Teenagers who earn their own money will certainly understand the old phrase “money doesn’t grow on trees,” in its true context. Plus, you can bet they’ll gain a stronger appreciation for the money you spend on them!

To further this financial responsibility, parents can advise their teens to spend their money in a certain way. Learning about money early on will also ensure a healthier, more responsible relationship with money as adults. At the beginning of the summer, create a spending and savings plan together.

The following are smart ways to divide a teen’s summer earnings.


If your teen is making a fair amount of money, they should be primarily responsible for necessities, other than housing and food. For example, if they empty the gas tank, it’s perfectly reasonable to ask them to refill the tank at least half way. And if they use up the last bit of shampoo, they should go to the store and buy more. Holding them responsible for these expenses will make them think twice before driving all over town and throwing away a half-empty shampoo bottle.

Social Activities

Your teen will undoubtedly want to spend any free time with their friends going to movies, shopping, and eating out. Your teen should also be expected to take care of these fun little extras. He or she just might be more inclined to enjoy family meals and have movie nights with friends at home instead of the theater. Having less money to spend on social activities will make them wiser about what a “necessity” is, versus an “extra.”

Teens Spend Money Wisely this Summer


Teens should always put at least 30 percent of their summer earnings, , if not more, of their paycheck into a savings account. When they go off to college, they will be thankful. Remind them that once they move out, they will have to spend a lot more money, and will not necessarily have time to work during school. It is also important for teens to learn not to spend frivolously and to always consider the future when spending money.

Start a Retirement Account.

If a teen starts investing in an individual retirement account (IRA), the money will have much more time to grow before retirement. Instead of opening an IRA at age 40, opening an account when only 15 will result in a lot of money when they’re ready to kick up their feet and retire. Furthermore, if money is withdrawn from an IRA for buying a first home or paying for college, it is tax- and penalty-free. Big bonus.


The stock market is confusing and overwhelming to many teens (and many adults, too). If you have a lot of knowledge about investing, then offer to help your teen make smart decisions. If you are also looking to invest money, it could be fun to learn about the stock market together. You really only need a few hundred dollars to start out, and this will definitely be manageable after a summer job. While investing is more risky than a savings account, there is also a great chance for success. Just think if your teen opens a mutual fund at 15, by 25 and out of college, he or she will already have 10 years of financial growth.


Giving to charity is an amazing feeling, for teens and adults alike. Encourage your teen to research local or national organizations, and find one that they are passionate about. Even if they can only donate $100 at the end of the summer, this small amount of money will mean the world to the organization and to your teen. If your teen can’t afford to donate any money, they can always volunteer their time. Your teen will benefit immensely from financial education early on—and why not start with summer?

Of course, all of these tips apply to adults as well. If your teen is financially literate before he or she goes off to college, they will have a head start in living life responsibly. Plus, they will learn to live off of their own money instead of yours!

Quick Tips for Teens to Manage Their Money

  1. Keep accurate records of deposits and withdrawals. They should record all transitions, including deposits, ATM withdrawals, and debit card purchases.
  2. Make sure they don’t spend more money than is in their account to avoid overdraft fees. This may seem obvious, but again, it is imperative that teens adjust their written record against their available balance shown by the bank. They should review their account statements as soon as they get them to make sure the numbers match up.
  3. Safeguard their personal account. Remind your teen that they should never give out account information unless they initiate the contact and to never leave their statements out in the open where others may see them. They should also protect their online purchases by shopping on reputable sites and saving online receipts. (Wells Fargo)

This article was originally published in Life with Teens Magazine Summer 2014. Read the entire issue here!

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