How to Explain Finances to Your Teenager

Teenagers have an unfair reputation for being flighty, self-involved, dramatic, or impulsive. In reality, teenagers are curious, opinionated, engaged, and passionate. At this age, kids are solidifying their beliefs about the world and themselves. This makes it an excellent time to introduce strong financial principles to your adolescent. As their brains mature and their prefrontal cortex becomes more active, they’re better able to grasp abstract concepts like interest, budgeting, and saving. Don’t miss this unique opportunity to help shape your child’s financial future. Here are a few tips on explaining finances to your teenager.

Show, Don’t Tell 

With teenagers, the best way that seems to get a point across is through a direct experience, rather than simply talking about it. If you put money into an educational savings account, such as a 529 plan, when your child was younger, now may be the time to show them how that initial investment has the potential to grow. Even a modest amount of money is likely to grow over 14  to 16 years. This concrete example of money that will be used for their education can help them grasp the power of compounding interest. 

Touch Base Multiple Times

Although you may be excited to dive into the world of finances with your teenager, trying to cover too much at once can overwhelm and frustrate them. Instead, take several opportunities to share bite-sized nuggets of financial wisdom with them regularly. Doing your taxes? Introduce them to a W2. Reviewing your family budget? Let them see your anticipated versus actual costs. Or, if there’s a big-ticket item that has caught their eye, capitalize on their natural interest to share strategies for earning and saving money. If their motivation is high enough, they may want to learn even more about how they can help to grow their savings.  

Encourage Family Charitable Giving 

Contrary to popular belief, young adolescents are often deeply interested in what they can do to make the world a better place and how they help those around them. To encourage that impulse, make charitable giving a part of your child’s financial education. Once you’ve set your family’s charitable giving budget, let each family member choose a specific cause they want to support each month. Charitable giving also helps make money more concrete. While $50 is an abstract number, one pair of shoes and two hot meals are the real-world impacts of giving back. Help your children understand how financial gifts can transform others’ lives—and their own. 

Put Them In Charge of One Part of Your Household Budget 

To give them a sense of real-world budgeting, put your teenager in charge of handling one aspect of your family budget. Groceries and food purchases are an excellent place to start. Give them a grocery list and a budget and see if they can stay under budget with their purchases. You may end up with some unusual brands in your pantry, but it’s definitely worth it for the hands-on experience. 

Start With a Debit Card 

Helping your child understand how a debit card works is best done under your roof before they head off to college or the workforce. Using the money earned from chores or a part-time job, help your child open savings and checking accounts connected to a debit card. Since they won’t be able to spend more than they earn, they’ll learn valuable lessons about budgeting. You can also require that they set up an automatic deduction from their paycheck into savings.

Let Southwestern Investment Group Help You Teach Financial Principles

Helping your children understand finances is an important part of raising kids who are ready for the workforce. For additional tips on how to help a teenager build a financial foundation, reach out to an advisor at Southwestern Investment Group. We’re here to help answer your questions so that you can feel empowered to pass on your financial wisdom to the next generation.

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Jeffrey T. Dobyns


President, SageSpring | Financial Advisor, RJFS 

Jeffrey T. Dobyns

President, SageSpring | Financial Advisor, RJFS

Beyond crunching numbers and investment strategies, at SageSpring, we’re about building relationships. When you encounter Founder & President of SageSpring, Jeff Dobyns, it’s easy to understand why this is at the very heart of who we are as a firm. You won’t find stuffy formalities with Jeff; instead, you can expect to find him sharing a warm smile, communicating a compelling vision, or patiently untangling life’s complex challenges with clients. He believes in truly getting to know clients, understanding their aspirations and priorities, and navigating their financial plans with a tailored, comprehensive approach. Our team members have often been caught taking notes on Jeff’s effortless relationship skills from a distance, and we admire them for striving to learn from one of the best. 

Jeff’s financial expertise and wisdom are the perfect match to his innate people skills. Jeff holds the prestigious CERTIFIED FINANCIAL PLANNERTM certification, Chartered Life Underwriter (CLU®), and Chartered Financial Consultant (ChLU®) designations, and has held executive positions with financial planning firms for more than two decades. 

His dedication extends beyond the office to the boardroom and the local community, where Jeff is passionate about giving back. He serves as Chairman of the Board of Men of Valor, a prison ministry and mentoring program. Jeff also serves on the board of Send Musicians to Prison, which shares hope, healing and restoration with the imprisoned through musicians & artists. Jeff actively supports other initiatives in the community by sitting on the board of The Signatry of Middle Tennessee and the Halftime Institute of Nashville. 

Witnessing his four children, Gracyn, Hunter, Tanner, and Logan, excel on the field is almost just as rewarding, if not more, than celebrating the victories of seeing his clients overcome obstacles and build wealth. Spending weekends boating on the lake, hiking mountain trails, and fishing with his family are the moments Jeff cherishes most. It’s this grounded perspective that reveals the true meaning of wealth for Jeff: not just numbers on a page, but the freedom to create experiences that enrich your life and the lives of those you love. When you choose the Dobyns McMillin Wealth Team, you choose more than financial expertise. You choose a partner who champions your dreams, celebrates your victories, and walks besides you on the path to achieving your unique goals.

**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER TM, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.