Money for Teens: One Savvy Author’s ‘Idiot’ Advice

Nearly a decade ago, Susan Shelly wrote The Complete Idiot’s Guide to Money For Teens.  The paperback was and continues to be one of the best read, most widely recommended texts on the subject.

A lot has changed for and about teens since Idiot’s was originally published in April 2001, as Shelly noted during a recent telephone interview.  The changes work both for and against adolescents.

teenager shopping on laptop
teenager shopping on laptop

As an example, teens today can do comparison-shopping on the Internet to identify the best brands and prices – a big plus.  But the Internet also enables kids to indulge in nearly instantaneous impulse buys: money enters and exits their bank accounts electronically, no wallet required.

Regardless of how teens avail themselves of today’s on-demand financial tools, the core principles of personal finance success – such as consistently saving a little now to accumulate a lot later – remain timeless.

Among Ms. Shelly’s 2011 recommendations:


To help teens be more thoughtful with their money, make sure they have financial responsibilities.  Whether it is paying for their own smart phone or covering the incremental costs of adding them to your auto insurance policy, let teens learn the lessons of paying for at least some of their own consumption.  Kids should know how much money they have and where it is.


Just like adults, Shelly says, some children are better savers than others.  But all teens should be encouraged to avoid impulse purchases. Shelly says she would encourage any teen bent on making a significant purchase to wait a week to see if he or she will still want the item as badly.  Ask teens to consider whether what they are buying is really worth it?


A part-time job and/or the launch of their own entrepreneurial business is helpful.  “I think that is very important, especially in times like these, that teens feel they are contributing to their family by being more self-sufficient,” Shelly advises.  Ideally, young adults will build their earnings to the point where they no longer need or ask for an allowance.


It would be wise to assist teens in pooling enough money to manage their own small portfolio of funds to be placed in select savings and investment vehicles.

Instead of buying kids traditional birthday, graduation and special occasion presents or gift cards, parents and other relatives should consider providing cash, stocks or other savings instruments. Having their own financial portfolios will not only help teens accumulate wealth – it will give them the opportunity to learn the dos and don’ts of successful money management.

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