How to Help Teens to Save Money

Clarify your expectations for your teen's financial responsibilities. Decide if she is responsible for paying for any expenses, such as clothing, gas for her vehicle, car payments or her cell phone bill. Review any allowance or other money you give her on a regular basis. Having a clear picture of her financial situation yourself helps you guide her money management.

Talk to your teen about his savings goals. If he spends money as soon as he gets it, discuss the reason for depositing into a savings account and why he needs to start now. Say, "When you move out on your own, you'll want money in savings as a financial cushion. Learning to save now will give you a head start and make it easier to put money aside later."

Calculate her total income with her help. Have her gather her pay stubs if she has a part-time job to get an idea of how much she brings in on average. Help her calculate what she gets from her allowance if she has one from you. Tally her expenses based on what she is responsible for paying. Help her estimate how much she spends on shopping and entertainment. If she's not sure, have her save receipts for a few weeks to get an estimate.

Build a budget with your teen based on the income and expenses you calculated. Show him how much extra he has that should go in her savings.

Brainstorm ways to cut down on her spending if her teen budget doesn't allow for enough savings. If she only ends up with $20 extra at the end of the month, her savings account won't build quickly. Suggest driving less in favor of walking to save on gas money, or withdrawing a set amount of money each month for her trips to the mall.

Set financial savings goals for your teen based on his specific financial information. If he's saving in general to build up his account balance, the goal might center around saving a specific amount of money each month. If he's saving for a large purchase, that is the focus of his goal. Example goals are to put $100 per month in savings or to save money for the next year to buy a car.

Break down her financial goals into steps so she can achieve them. If she's saving money to pay for a class trip the following summer, figure out the total cost of the trip and the number of months she has to save. Divide the cost by the number of months so she knows how much she needs to save each month.

Set up an automatic savings plan with the bank so that part of his paycheck automatically goes into his savings account each week. This helps him build a savings account without having to schedule individual transfers or remembering to deposit money in his savings account.

Check in with your teen weekly or monthly to assess her financial situation. Help her review her goals and the actual results to see if she is staying on track with her savings.

Address money skills that are difficult for your teen. If he uses his debit card carelessly or writes checks that make his bank account overdrawn, point out those issues to him. Review balancing his checkbook so he doesn't have a negative balance. Show him how the fees add up and take away more of his money.

Model your own financial responsibility to show your teen how you save money. You don't have to get too specific, but letting her know that you shop around for the best prices and save for a large purchase sets a positive financial example.