What is the most important financial literacy skill teens need before becoming adults?
Teaching smart budgeting for teens who struggle with planning requires tailored strategies that account for executive function challenges. By making financial concepts visual and concrete, simplifying choices to reduce overwhelm, and implementing consistent routines, parents can empower their teens.
These financial skills are crucial for independence for any teen, but may be harder for some to learn than others. Patience and modeling will help make these skills part of everyday life for families. Here are 4 tips for budgeting for teens, including practical budgeting activities especially for neurodivergent youth.
1. Make it Visual
Abstract concepts like “money” and “saving” can be very difficult for kids and teens with executive function challenges to grasp. They benefit from seeing and touching.
Tip: Continue to use visual aids and physical money, but transition to digital tracking alongside physical. Emphasize how money moves and grows (or shrinks).
Practical Activity:
Digital + Physical Tracking Combination: Help them set up a simple spreadsheet or a beginner budgeting app (like Monarch or You Need A Budget – YNAB, or even a simple notes app) for tracking income and expenses. However, still have a physical envelope or jar for specific spending money for immediate gratification, like Fun Money or Snacks. This bridges the gap between concrete cash and abstract digital tracking. For larger savings goals, help them set up a separate savings account and visually track its growth online.
Goal Progress Board: Instead of a thermometer, create a “Goal Progress Board” (can be a whiteboard, corkboard, or even a digital dashboard they customize). They can list specific savings goals (e.g., “Gaming Console,” “Concert Tickets,” “Driving Lessons,” “College Fund”) and visually represent progress with percentages, charts, or even pictures of the item. This helps them see the long-term benefit of their budgeting efforts.
2. Simplify Choices
Too many options or complex decisions can be paralyzing for someone with executive function difficulties. Simplifying choices can help reduce the overwhelm.
Tip: Guide them through decision-making frameworks rather than simply limiting options. Help them understand the “opportunity cost.”
Practical Activity:
Needs vs. Wants Decision Matrix: Introduce a simple decision matrix. When they want to buy something, have them (or help them) quickly list 3-5 pros and cons, or categorize it as a “Need” or a “Want.” Discuss the “opportunity cost” – “If you buy X, you won’t have enough money for Y.” This helps them pause and evaluate without being overwhelmed by impulsive desires. You can even have a laminated card with this simple matrix.
Pre-Purchase Planning & Research: Before any significant purchase (e.g., new shoes, a game), have them research options online before going to the store or adding to a cart. This allows them to compare prices, features, and reviews in a low-pressure environment, reducing impulsive decisions at the point of sale. Consider setting a rule: “No buying until you’ve done your research.”
3. Implement Routines
Predictability and routine help build habits and reduce the cognitive load of decision-making. Be consistent together as a family. Let your kids see you doing a financial check in or paying bills.
Tip: Foster self-management of routines, using technology to support consistent habits.
Practical Activity:
Weekly Financial Check-In: Establish a weekly “Financial Check-In” time, such as on Sunday evenings. During this structured 15-20 minutes, they log their spending, update their budget, and plan for the upcoming week’s expenses. Use a shared calendar reminder. This regular routine helps them stay on top of their money without it feeling like a huge chore.
Automated Savings Transfer: If they receive an allowance or earn money, work with them to set up an automated transfer from a checking account to a savings account (even a small amount like $5-$10). This automates the saving habit and removes the need for constant conscious decision-making. Show them how to set this up on an online banking portal.
4. Use Reminders
Time management and remembering tasks can be challenging. External cues are beneficial.
Tip: Encourage the use of personal digital tools for reminders and planning.
Practical Activity:
Digital Calendar/App Reminders for Financial Tasks: Teach them how to set recurring reminders on their phone’s calendar or a task management app for financial responsibilities such as: weekly budget check-in, pay phone bill, or transfer savings. This leverages tools they already use and helps them internalize future planning.
(Want other tips for digital calendars? https://tailorjoy.com/10-tips-for-using-google-tasks-and-google-calendar-as-a-student-agenda/ )
Cool Down Period for Impulse Buys: For any non-essential item over a certain price point, such as $20, implement a mandatory “cool-down” period like 24-48 hours before purchasing. Set a reminder on their phone that pops up after the cool-down period, asking “Do you still want to buy this item?” This helps combat impulsivity common with executive function challenges.
When a minor financial challenge arises such as “I don’t have enough for that game,” “My phone bill is due”, instead of immediately solving it for them, present it as a challenge. Guide them through brainstorming solutions: “What could you do to earn more?” or “Can you delay this purchase?”. Celebrate their effort and resourcefulness in finding a solution, not just the solution itself. This builds self-efficacy.
Teaching smart budgeting for teens who struggle with planning requires dedication and patience. Remember to make it visual, simplify choices, implement routines and use reminders. Teens with executive function challenges can get discouraged easily. Celebrating small successes is vital for motivation.
Shift from external rewards to recognizing their growing independence, problem-solving, and responsible choices. Celebrate your teen’s efforts and resourcefulness in solving financial problems. Celebrate budget wins, such as a savings goal or making a responsible financial decision.
Celebrate your small wins as a parent or caregiver, too! Parenting is not for the faint of heart, and there’s so much to learning to fit into these years beyond just budgeting for teens!
Table Talk: What do you do for regular financial check-ins? Would you rather pay off larger bills or fill up your savings account?
Want more life lessons?
https://tailorjoy.com/10-life-skills-for-the-launching-years/
Want more executive function tips?
https://tailorjoy.com/executive-function-activities-for-students/