Financial education for teens: Practical tips to build money skills.

Many parents want to teach their teens how to effectively manage their money, but it can be daunting to think about where to begin. Financial education for teens is crucial to help them make sound decisions and build lifelong money management skills. To make sure your teens don’t tune you out when it’s time to talk money, make the conversations engaging. Here are some ways to teach teenagers and young adults to be financially confident.

Key money management skills every teen should learn.

There are many aspects of personal finance that are valuable to understand. According to the Consumer Financial Protection Bureau (CFPB)link opens in a new window, there are six key areas that help build a strong foundation for making smart financial decisions:

1. Earning: Understanding how paychecks work.

Keep conversations age-appropriate. For younger teens, discuss pay rates for chores or small jobs. For older teens with their first part-time job, explain how taxes affect paychecks, and the difference between gross pay and net pay.

2. Saving: Building healthy money habits early.

Learning to save at a young age can help set the stage for long-term financial health. The CFPB recommends explaining how much to save and why it matterslink opens in a new window. Help your teen open a savings account and learn how to track their balance and spending.

3. Planning: Setting financial goals for future financial success.

Teach your child how to make intentional spending choices and plan for their future needs. Encourage them to think long-termlink opens in a new window about financial goals such as buying a car, saving for college, or moving out on their own. Planning helps them make more confident financial decisions.

4. Shopping: Learning to compare and make smart money choices.

In the context of financial education, “shopping” means to compare priceslink opens in a new window before spending or investing. Show your teen how to research prices, interest rates and savings options so they can make the most of their money.

5. Borrowing: Understanding credit and debit.

Credit cards and loans can be useful tools, but they come with responsibilitieslink opens in a new window. Teach your teen how interest works and how late payments can affect their credit score. Encourage them to pay off balances in full each month and check their credit score regularly once they turn 18. Help your teen establish a positive credit history and understand how that can make it easier to qualify for future loans.

6. Protecting: Why insurance matters.

Help your teen understand that having insurance protects against financial riskslink opens in a new window. Discuss the basics of health, auto, renters and disability insurance, and explain how each type provides peace of mind and financial protection.

How to talk to teens about money.

Once your child has a foundation of financial knowledge, keep the conversation going. Maintaining an open line of communication about finances can help them feel comfortable coming to you with questions or for advice.

Set a positive tone for these discussions by focusing on open, two-way conversations rather than lectures.

Be prepared.

Encourage your teen to save regularly so they’re prepared for both good and challenging economic times. Discuss the importance of an emergency fund, budgeting and setting savings goals. You can also model these habits by sharing how your family prioritizes savings or manages financial uncertainty.

Share your own financial lessons.

Teens learn a lot from real-life examples. Share your own financial stories, both mistakes and successes. Maybe you once used a high-interest credit card for a vacation and regretted it, or you were grateful to have an emergency fund for a car repair. These stories make financial lessons more relatable.

Let them learn by doing.

Experience is one of the best teachers. Encourage your teen to make their own financial decisions, such as managing their allowance, setting savings goals or budgeting for a purchase. These small experiences build confidence and accountability.

Keep the money conversation going.

Talking about money shouldn’t be a one-and-done lesson. Ongoing, age-appropriate financial conversations help teens develop essential skills like budgeting, saving, credit management and planning for the future.

By continuing these discussions into young adulthood, your teen will be better equipped to make informed choices, avoid unnecessary debt and build a secure financial future.

Commerce Bank offers youth-friendly bank accounts to support families in building financial confidence together. Consider helping your teen open an account so they can continue to lay the foundation for lifelong financial well-being.