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Money Matters: Why it Pays to be Financially Responsible

Responsible money management is often a foreign concept to teens that is complicated and confusing. Yet, if they learn how to save and be financially responsible early, they can protect themselves in the future. To empower teens to get the best start possible, here’s a closer look at how to explain financial responsibility to them and four key strategies they can start practicing right now.


Being financially responsible means you have a process for managing your money that is productive and in your best interest overall. A cornerstone of financial responsibility is saving to protect yourself and the things you have. Here’s a look at a few other behaviors of a financially responsible person that you can share with your teen:

  • Understands their costs and income, budgeting to ensure all their expenses are covered
  • Saves money for the unexpected costs that will pop up sooner or later along with future items and experiences
  • Has a healthy attitude toward money, taking a long-term view and living within their means
  • Pay bills on time
  • Manages credit responsibly and looks for ways to cut costs
  • Shops around when making any financial decision to ensure they are getting the most value on expenses
  • Pursues proactive financial education, both understanding basic financial concepts and financial products
  • Has a written strategy, often created by working with a financial professional

Be sure to explain how financial responsibility results in less stress. On the other hand, explain how someone who is not financially responsible wings it. They may not make sure they will have enough money for their living expenses, may not save, and might need help covering their basic needs, especially when emergencies come up.


To help your teen develop their financial responsibility, here are four key strategies you can share:

  • Start saving: It’s never too early to start saving and protecting your future. When your teen receives money for their birthday, from a holiday, , or something else, have them set aside and save percentage (at least 10% to 20%) every time.
  • Understand the cost of living: Talk with them about the household bills and divide them by the number of people in the family to see how much they would be responsible for. This exercise will help them understand what it takes to cover their basic necessities when they go out on their own.
  • Track spending: It’s essential to understand where your money goes. Have your teen keep track of how much money they receive, how much money they spend, and what they spend it on. They may be surprised by how all the little purchases add up. Review together and guide them to consider if it is the best use of their money.
  • Educate: Help them to learn how credit, interest, and investments work. By educating your teen, they will be able to make better decisions like managing their credit well, having a good credit score, and getting better interest rates, insurance rates, rental terms, etc.

Financial responsibility is something you can learn early on. If your kids can start as early as their teens, they will be ahead of the game and it can pay off later

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