Parents, Teens, and Money: Budgeting and the Broken Record

With regards to parents, teens, and money, we are full of automatic responses, most of which don’t really make sense OR make a difference with kids when we really look at them. One example is BUDGETING.

Budgeting your money is just like dieting—they both promise big results and they both ultimately fail because they don’t take into consideration the way human beings are designed. Diets make you want to eat and budgeting makes you want to spend!

Wealth builders are not about budgeting; they are interested in tracking net worth. Budgeting is a survival technique that is supposed to help us avoid money problems like overdrawn checking accounts or spending beyond our means. But there is a MUCH BETTER WAY!

The most honest article I have ever seen about budgeting is here.

Instead of budgeting, encourage your teen to spend, save, give, and invest intentionally. The jar system is one way, and the Silo System by WealthQuest for Teens is a version of this approach that is specifically designed for teens. Experts recommend that young children use this approach to divide their “income” (all the money that comes to them) into 3 accounts: spend, save, and give. WealthQuest for Teens teaches a TEENAGE version, which involves 6 accounts: Necessities, Rainy Day fund (or Learning fund), Big Ticket Items, Fun, Give, and Future Financial Freedom. This system works for them now AND for the rest of their lives.

Jay Sanders talks about how and why this approach is so effective on his site, which is also FULL of great content about financial literacy.

And it works WAY better than budgeting! Your teen will love this system, because it makes a direct connection between their money and their goals, dreams, and values.


Easy Action: Teach your teen a great money management system that is age-appropriate.

Resource at Your Fingertips: WealthQuest for Teens’ Silo System teaches a system that works great for teens now AND for the rest of their lives.


Remember to Pledge to teach your teen to be an excellent money manager! Let the world know that parents are doing their part to build a financially literate society!

© Your Teen’s Money Skills, Inc., 2012 All rights reserved worldwide.

How Safe is Your Teen from a Disastrous Financial Future?

As parents and leaders, we want to do whatever we can to raise our teens so they are prepared to be happy, productive, thriving adults!

And sometimes it looks like, once they are teens, there’s not much more we can do for them. We’re busy, they’re busy, and just holding it together on a daily basis seems like all we can do.

But, we make time for what’s important. And, society isn’t calling for us to teach our teens great money habits and attitudes. We don’t talk about it with each other, we don’t talk about it with our teens, we don’t have easy at-your-fingertips resources to lean on, and we don’t get reminders or reinforcement in our environment.

So, at what cost do we just leave it alone? We ALL know what life is like without money skills. Teens WANT to learn to think about and manage their money. They WANT to have the confidence that they will be OKAY as adults. More than that, they WANT to know that they have every chance to make their dreams come true, to make a difference in the world, and to provide opportunities to the people in their lives that they love.

There are loads and loads of resources online that are easy and effective. It just takes a decision on your part that you will make this important; important enough to make time for, important enough to spend a little money on, important enough that you will make sure that your teen grows in this way.


Easy Action:  Talk to your teen about setting a specific financial life goal.  For example, “By X (age) I will have X (net worth) so I can _________ (benefit that is meaningful to your teen).”  Like all areas of life, we first set meaningful goals, then our journey becomes the discovery of how to achieve our goals.

Resource at Your Fingertips:  Get resources for YOU and YOUR TEEN at www.wealthquestforteens.com


Please vote on the Parent’s Promise poll that you will prepare your teen for adulthood with effective money habits and attitudes!

© Your Teen’s Money Skills, Inc., 2012.  All rights reserved worldwide.

Top 10 Most Important Things Parents Can Do to Raise Teens with Great Money Skills

  1. Have your teen set a financial freedom goal that sounds something like, “I will have $X by age X that will allow me to be completely financially free so I can have _________, be ______________, do _____________, and help _____________ without financial worries or constraints.”
  2. Teach your teen the habit of tracking his/her money. Use Mint.com or an Excel spreadsheet or a handwritten journal. Set a schedule for updating all assets and liabilities and follow it.
  3. Support your teen to experience and explore opportunities to learn about money online, in books, and in programs. Check out WealthQuest for Teens’ online video/workbook program that is narrated by and for teens.
  4. Teach your teen to manage his or her money so that spending, saving, investing, donating, and earning are coordinated to happen at the same time.
  5. Teach your teen positive, healthy ideas about money that are not rooted in fear or myth. For example, “money allows people to express who they are; it doesn’t make them a particular way or change them.”
  6. Talk to your teen about your finances. Make money an interesting conversation topic.
  7. Make sure your teen is accountable for his or her money. Your teen should have financial responsibilities and experience natural consequences for poor money management.
  8. Make sure your teen has at least one active bank account that has a meaningful role in his or her life.
  9. Have your teen routinely give 10% of all the money he or she receives to a cause he or she cares about. Check out www.dosomething.org for opportunities and ideas.
  10. Encourage your teen to earn money in creative and productive ways.

Easy Action:  Teach your teen a great money management system that is age-appropriate. 

Resource at Your Fingertips:  WealthQuest for Teens’ Silo System teaches a system that works great for teens now AND for the rest of their lives.


Remember to Pledge to teach your teen to be an excellent money manager!  Let the world know that parents are doing their part to build a financially literate society!

© Your Teen’s Money Skills, Inc., 2013.  All rights reserved worldwide.

Checklist for Parents Raising Teens with Great Money Habits and Attitudes

√  Practice:  Does your teen employ a system of money management that has their money lined up with their current needs, wants, future goals, and commitment to the greater good of humanity?

√  Talk:  Does your teen talk about money with people who can teach them about it?  Do you talk about money at the dinner table and in the car?

√  Learn:  Does your teen engage in lots of experiences where they get to explore money—reading books, watching DVDs, doing online video programs, surfing the web?

√  Give:  Does your teen give 10% of all of their earnings and gifts to a cause that matters to them?

Reader challenge: Can you check off each item on this list?  If not, try tackling a new item each week!


Easy Action:  Begin a money journal with your teen.  Teach your teen to figure out his or her current net worth.  Then, set a goal for updating this document routinely (Weekly?  Monthly?  What works for you?) and create a reminder system.

Resource at Your Fingertips:   Check out this article from TheMint.org about teens and tracking your net worth.

MAKE IT REAL, MAKE IT HAPPEN: Teaching your teen great money management skills NOW and you’ll never regret it!  www.wealthquestforteens.com


Remember to Pledge to teach your teen to be an excellent money manager!  Let the world know that parents are doing their part to build a financially literate society!

© Your Teen’s Money Skills, Inc., 2013 All rights reserved worldwide.


Easy Action:  Talk to your teen about setting a specific financial life goal.  For example, “By X (age) I will have X (net worth) so I can _________ (benefit that is meaningful to your teen).”  Like all areas of life, we first set meaningful goals, then our journey becomes the discovery of how to achieve our goals.

Please vote on the Parent’s Promise poll that you will prepare your teen for adulthood with effective money habits and attitudes.  Our goal is to collect 500,000 votes to show the world that conscientious parents are making this life skill a priority at home.

© Your Teen’s Money Skills, Inc., 2013.  All rights reserved worldwide.

Filling out a W-4 form may be the first important “adult” financial decision your teen will make!

Guest post written by Chris Shannon.

Career center staff, overwhelmed, simply told several hundred teens participating in a summer jobs program to “just put ‘Exempt’ on the W-4 withholding form” so that no taxes are taken out. When asked why, staff replied, “It’s too much effort for these students to file to get that money back; besides, they’re students.” True, they are students, but what a loss of a teachable moment, and what a shock if some of those students end up earning enough money that year to be required to pay taxes. Chances are for those students, by April 15th, those summer earnings are long gone.

According to the 2012 W-4 Form, students earning less than $8,000 are indeed “exempt” and do not pay taxes. Now, the teens in this program were able to earn a fairly good salary that summer, $10 per hour, 30 hours per week for 8 weeks. Right there, those students have earned $2,400. That leaves $5,600 before they start have to pay taxes. Divided by the other 10 months of the year, students earning as little as $560 a month (which is quite possible at 15 hours per week earning minimum wage) can find a nasty surprise waiting for them come tax time.

So, what to do? Well, it depends on your teen’s current savings and spending habits. Any financial advisor worth his or her salt will tell you to keep as much as your paycheck as you can and invest a portion so it earns money for you, rather than for Uncle Sam. [This means to put “exempt” or to claim more under “allowances” on the W-4 (“1” or “2”) and not less (“O”).] That is a great strategy, but as a teen, I know I wasn’t so great at that “saving” thing, much less that “investing” thing.

If your teen needs to learn basic savings skills, then have Uncle Sam take the maximum allowance, or “0.” The teen will be disappointed with the smaller paycheck but will quickly adjust to the pay they take home. Then, once employment W-2’s roll in the following January, sit with your teen to fill out tax forms. They may be surprised how the little taken out of their paychecks can add up when they get a refund! [This lesson will be repeated down the line when your teen is considering investing in a company retirement account. So many twentysomethings put off a retirement fund when time is their greatest asset.]

This lesson doesn’t have to be lost on teens working odd jobs, such as babysitting or lawn care, or on those who have not yet joined the workforce. Have your teen sit with you come tax time. Share your W-2 forms and explain how your choice impacted the amount of taxes taken out and how that compares to the taxes owed. Review Table 1 on the IRS W-4 worksheet. Discuss with your teen how this choice can align with their spending and savings values. And, best of all, help make this first adult financial decision an informed one.

For more information, check out the Dept. of Revenue teen video on the W-4 and the IRS W-4 Form. Bankrate.com primer “Understanding the W-4” has some good information on how to adjust your withholdings on the W-4.

About Chris Shannon: An educator for over twenty years and a mom of two young kids, Chris spends most of her time as a financial literacy consultant for rAsa consulting. Chris has developed educational materials and trainings for the National Endowment for Financial Education, the National Jump$tart Coalition, the Massachusetts Office of Consumer Affairs and Business Regulation, and many credit union organizations. She currently serves on VISA’s Educator Advisory Council.


Easy Action:  Begin a money journal with your teen.  Teach your teen to figure out his or her current net worth.  Then, set a goal for updating this document routinely (Weekly?  Monthly?  What works for you?) and create a reminder system.

Resource at Your Fingertips:  Check out WealthQuest for Teen’s Online Video Seminar and QuickStart Guide for a fun way for your teen to learn about saving, managing, and growing his or her money!


Remember to Pledge to teach your teen to be an excellent money manager!  Vote “Yes. I will make the promise!” to let the world know that parents are doing their part to build a financially literate society!

© Your Teen’s Money Skills, Inc., 2012 All rights reserved worldwide.