January 21, 2025
Personal Finance Skills for Teens
Middle school and high schoolers experience many exciting changes and opportunities that come with a new sense of independence in all aspects of life. Part of growing up is developing skills surrounding money and creating healthy financial habits that can carry into adulthood. Here are a few things teens can do to start off their personal financial journeys strongly:
- Practice budgeting: Understanding how to create, and stick to, a budget is crucial for maintaining healthy financial habits. Take time to sit down with your teen and discuss their spending habits. This can include using their own money to go out to eat or to the movies, online shop and even for subscription services like Netflix and Spotify. Impulse spending is something we all do, but it can be especially easy for teens to spend all their money on the latest microtrend or an evening out with friends. Start by having them track their income and spending weekly—a habit that will serve them well for the rest of their lives. Get started by using Cape Cod 5's Budget Calculators.
- Get a first job: Around this age, your teen may be itching to earn their own money. Jobs like babysitting, yard work, ice cream scooping, and restaurant bussing can help teens gain relevant experience and learn the value of hard work. First jobs often provide core experiences that carry into future career paths and teach foundational skills such as customer service, responsibility, social skills and time management. They can also mark the perfect time for your teen to start a banking relationship and begin organizing their finances. If your child is not old enough to have an official job, consider assigning some household chores such as watching younger siblings, cleaning their rooms, doing dishes, etc.
- Learn about privacy and security: TikTok, BeReal, Instagram, Snapchat. In an era of social media and limited digital privacy, it is important to have a conversation with your teen about what should, and what shouldn’t, be shared online. Personal identifying information such as school, town, last name, birthday and home address should be kept private. Keeping social media accounts private, blocking suspicious accounts and never sharing personal usernames or passwords (especially for bank accounts) is essential to maintaining digital privacy and personal finances. Visit Cape Cod 5's Security Center for tools and resources.
- Understand taxes: Taxes are a part of life. In short, the money collected by the local, state and federal government goes toward things like schools, hospitals, parks and roads and is essential for maintaining the infrastructure around us. Income taxes are filed yearly and are, almost always, deducted directly from one’s paycheck based on the amount of money (income) you make. Sales taxes are the most relevant to teens, as they appear in everyday life as an added fee on purchases of daily items from groceries to clothes. Sales tax, which varies by state, is 6.25% in Massachusetts with some exemptions as to which goods it applies to. Make sure your teen understands the basics of taxes and factors them into their budgeting and personal finance decisions.
- Plan for the future: With the fun and independence of young adulthood comes financial costs. From car payments to college funds, consider discussing your teens' aspirations for the future. Whether they want to go to a four-year university, community college, technical or vocational school, or join the military or workforce can dictate how they can best allocate their savings. If your child has their eyes on university or another post-secondary education program, consider estimating what the expenses will be down the road. One way you can do this is by using the Cape Cod 5 calculators to estimate the savings needed for college.
Cape Cod 5 is thrilled to work with so many schools and programs across Cape Cod, Martha’s Vineyard, Nantucket and Southeastern Massachusetts to promote personal financial literacy. We are here to support clients through all stages in their financial journey. If you are looking for a way to grow your savings account, enroll in SaveUp to automatically round up your Cape Cod 5 Visa® debit card purchases to be deposited into your designated Cape Cod 5 savings account. For more information visit: www.capecodfive.com/saveup.
