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Teenagers & Saving

Talking with your teen about money can go smoother if you keep the conversation age appropriate. The conversation starters and activities here can help you find the words.

Conversations about saving

  • Once your teen has a steady job, help him set up a savings program so at least 10% of earnings goes directly into his savings account
  • Help your teen track what he actually spends in a month. Talk about how to estimate three months’ worth of expenses, and how much to save from each paycheck to build up his savings
  • Talk about how to keep money in a safe place, like a federally insured bank or credit union
  • Explain, if possible, it’s better to have more savings – like six to nine months’ worth of living expenses, instead of only three
  • Discuss how much your child can save. What'll she gain? What'll she have to give up? Is it worth it?
  • Explain to your child once she starts a job, she may be offered an account at work called a 401(k). Some employers provide matching contributions as an incentive to save, so it’s smart to save at least enough for the maximum matching contribution

Activities about saving

  • Compound interest is when your child earns interest on both the money she saves and the interest she earns. Show your child the following: If she sets aside $100 every year starting at age 14, she’d have about $23,000 at age 65. However, if she begins saving at age 35, she’d have about $7,000 at age 65. The example assumes the account earns 5% every year.
  • Experiment with your child to show the effect of saving different amounts at different interest rates. Try the U.S. Securities and Exchange Commission's (SEC) compound interest calculator


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Help your teen reach money milestones...