For the teens, the world is their oyster. They have the freedom to pursue the career of their choice and live a carefree lifestyle. As a youngster, they are also prone to impulses. Setting financial rules, boundaries, and guidelines early on can go a long way in limiting your teenager’s spending. 

Here are some of such strategies:

Budgeting Lessons 

If you sponsor every ‘want’ of your child, you are not making them financially responsible. Rather give them a monthly budget – say a fixed amount of Rs 10,000 or so – and tell them to manage their expenses within it. Whether they would spend it on a movie or an afternoon-break burger is their choice. However, if they come back within two weeks asking for more money, refuse to give. 

As per 2022 study made by fintech (a pocket-money app) Junio, children usually, spend a large part of their pocket money on utility payments such as mobile recharge, fuel bills, cab rides, food bills and others. 

Tell them to maintain a book of accounts which will show spending patterns. Let them figure out the ‘avoidable’ expenses and, the possible savings made from them. Over the months, by prioritizing ‘wants’ over ‘needs’, they would learn to live within their means.

If they are genuinely falling short of money, despite being prudent in spending, consider increasing their monthly allowance.

 Schools or colleges seldom cover aspects of personal finance management for their students. As a parent, you need to help them inculcate a budgeting habit that will stand them in good stead when they become adults.  

Teach responsible borrowing

Various studies reveal that people tend to spend more using plastic as opposed to cash. While digital payments are the new norm and carrying too much cash unsafe, ensure you are doling out the credit card option to the teens only after testing the waters. 

Teach them how credit cards work and the importance of paying bills on time. Show them your credit card statement and familiarize them with different items on the bill –the minimum amount due, total outstanding, interest rates, and penalty charges. 

Once, they get a hang of it; give them an add-on credit card with a limited credit line. Make it clear beforehand the kind of expenses that they could spend through the card. 

Additionally, monitor their expenses whenever the monthly statement is presented by the card company. Pull them up for any digressions. If the child is prone to impulses, give it only after they demonstrate responsible spending behaviour.

Credit cards should also be viewed as a convenience that often helps in case of emergencies – be it a flat tyre or any medical emergencies. Also knowing that the teens are prepared to take care of any contingencies gives you peace of mind. 

Earning money to know its value

The best way to teach teens about the value of money is by making them work for it. Some daily chores should not be paid for, as they are part of living as a family. For instance, cleaning the house floor, doing the laundry, and so on. Instead, pay for fixing a broken car or for slashing family travel expenses by coming out with a well-researched travel plan. 

Many teens do a side hustle to supplement their pocket money. By letting them do a part time-job or gig, you could let them know that you have to work hard to earn it. This will also help them with their college applications, especially if they intend to study abroad.

By making them pay a part of their bills, you can help them become financially responsible as well. 

Sharing your experiences

When you shop in a store, take the teen along. Alternatively, if you are shopping online, make them sit beside you. Over time, they will learn how to compare items and brands to get the best value for one’s buck. They will also understand that sometimes it is good to buy something in bulk instead of buying several smaller quantities of it. 

Similarly, make them part of the family budgeting process so that they understand household finances in a real-world setting.

You need not reveal everything, but can broadly show in percentages where the money is going and in which spending category (housing, transportation, food, utilities, medical & insurance, entertainment, and so on). In addition, the extent of savings you are making and the financial goals that it is being routed into. 

If there are debt repayments, teach them how it is influencing household finances and savings rates. And what it would be if there were no debt. 


With endless wants and considerable peer pressure, spending has become second nature for teens. By teaching them the importance of living within one’s means, you can expect them to grow up to become financially responsible adults.