Having conversations about money with teens is not easy. In this post I share why the most important money competence you can help your teen develop is spending money, the five essential skills when spending and how I’m trying to do this with my son.

The five essential skills to master when spending money are:

  1. Make the difference between ‘wants’ and ‘needs’
  2. Taking control of your wants
  3. Prioritise spending
  4. Take the long view
  5. Spend mindfully

Having conversations about money with teens is not easy. For that matter, having any conversations with teens is like squeezing water out of stone: it’s been sometime since I’ve heard anything than grunting and mumbling.

Still, having conversations with teens about money is absolutely necessary. After all, we are not teaching them to be dependent children all their lives. Don’t know about you but I hope that one day soon my son will be an independent man; put in other words, I hope that one day soon my teen son will be an adult.

Much of the independence that signifies adulthood comes with mastering your relationship with money. (Please note that I didn’t say ‘mastering your money’. I really believe that the relationship between our finances and us is one of mutual respect and collaboration, not one of master and slave.

So we agree; talking to your teen and teaching them about money is important.

Let me ask you though, what do you think is the most important competence you need to teach your teen?

Did you think that it is most important to teach them how to save money? Or you thought that it is how to make money, right?


The most important competence to help your teen develop is how to spend money.

It won’t even occur to you to teach your child how to diet, would it? You will try to teach her how to eat healthy.

It is the same with money, you know. You have to teach them how to spend properly; most else will follow from there.

‘Okay, Maria, it is all too well telling me to teach my kid how to spend money. What do I teach her though?’

Thought you’d never ask.

To help your teen develop the competence of spending money properly you need to help them master five essential skills.

#1. Know the difference between ‘wants’ and ‘needs’

A lot has been written in personal finance about knowing your needs from your wants. Mainly, this is done in the context of sticking with our needs when we want to save money.

I’ve never bought this one, you know. I think that keeping to our needs can backfire big time and that most people who fall off the ‘I’m sensible with my money’ wagon have been trying to do that for a long time. Sticking to your basic needs for a long time makes one crave something more.

We both know where cravings lead, don’t we.

This is why I’ve always believed that we have to focus on our wants.

How to know the difference between wants and needs?

This is easy. Everything that is absolutely essential to your survival is ‘needs’. On the other hand, everything that is not absolutely essential but adds colour and spice to your life is ‘wants’.

(You see that ‘needs’ and ‘wants’ can be very different for different people and at different stages of life.)

Knowing the difference takes only practice.

#2. Taking control of your wants

Left unchecked, our wants can take over our entire lives.

Hence, it is important to learn to control our wants. Most will interpret this as refusing some of out wants.

I believe that the trick is to learn how to want less.

This is a really hard one to help your teen with; there is so much temptation, so much to lust after out there.

I suppose, this can be done through example (you practice restraint) or through experience (you place your child in situations where they are happy with very little, like taking them hiking, camping etc.).

#3. Prioritise spending

Whether you are wealthy or hard up for money, you cannot have everything.

At best you can have anything.

Here the mastery is about prioritising spending. Simply put, it is up to you to decide what matters in your life and spend your money on it.

After all, money is only good when it nourishes your life.

#4. Take the long view

The thing about money is that you cannot spend it twice. This is why proper spending includes taking the long view on life.

You have to make sure that there is some money put on the side if you don’t want to miss the great opportunities that life inevitably brings.

(These opportunities don’t need to be business ones; there are opportunities to enjoy your-self.)

#5. Spend mindfully

There is nothing wrong with spending money; if you spend it mindfully that is.

Make sure that you slow down a bit when you put your hand in your pocket. Being hasty when you spend money is a bit like scoffing food: your brain is trying to deceive you that it doesn’t matter because you did it so fast.

It matter; it matters in both cases. Scoffing food matters for your waistline; spending hastily matters for your bank balance.

Where do my son and 10 euro come into all this?

I did promise to tell you about my conversations about money with my son and how I’m trying to help him develop the five skills of spending money.

Thinking about it, I decided that apart from example experience would work best.

During our holiday we set a spending allowance for our son and his friend. They were to have between them a certain sum and it was to last them for two and a half days.

When I first told my son what is happening he said:

“But mum, one ride at the beach costs…’ (insert a number of your choice).

“Exactly, son. This means that you have to decide what you do and how much of it you do.”

He went off with his friend. They went to the beach, did their own thing while I was lazing around the swimming pool, reading novels.

Two days later our son burst into our room.

“Dad, could I borrow 10 euro, please?”

You know what? John was going for the wallet.

“Nope. You have to wait till it is time for the next instalment.” – I said.

As you may well imagine, this didn’t make me popular with my son. Still, I stuck to my guns and it will eventually, I believe, pay off.

My son had the opportunity to learn through experience about controlling his wants, prioritising spending, taking the long view and spending mindfully. This, my friend, is four out of the five essential skills of proper spending. Not bad at all!

If all this learning costs me a bit of teenage angst, I’m game.


Conversations about money with teens are absolute necessity but not much fun. Part of the problem is that we as parents try to teach our teens the wrong thing about personal finance, namely, how to save money.

I am teaching my son how to spend money properly and believe that this is the cornerstone of a healthy relationship with money.

Do you talk about money with your teens? What are the money management skills you teach your children?