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4 Money Mistakes Most Parents Make

As a parent, it’s easy to get lost in all the expenses of having a teen, whether that means opening your own wallet for uniforms and college applications or encouraging your kid work after school to earn an iPad and pay for gas. All too often, though, parents gloss over money talks (or skip them altogether), and teens are left without any info on how to wisely handle all those $20 bills.

Here, experts explain the biggest money mistakes parents of teens make, and how to remedy them quickly.

Mistake #1: Putting off money talks. Children as young as 3 can understand basic money concepts like waiting to make purchases and choosing wisely whether to spend or save, says Beth Kobliner, author of Get a Financial Life. If you didn’t introduce financial concepts in the toddler years, don’t stress out, she says—but do get to it. Have the same basic conversations, but just adjust the vocabulary to meet your teen's understanding.

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Use what’s happening in your teenager’s life as a launching point for money talks. When prom approaches, create a budget together, have your teen research costs for a dress, tickets and any other expenses. If college is on the horizon, discuss tuition, book costs, and room and board openly. If your kid's just landed a job, get her set up on a site like or with a free app to track what she's earning and outline how she'd like to spend it.

How else can you jump in?

1. Be open about the family expenses, from groceries to electrical bills. Teens will benefit from knowing real costs of living independently.

2. Institute a mandatory wait-time before any big purchases. Discuss the costs, along with pros and cons, and then revisit it all two weeks later to stretch critical thinking skills (and dollars).

3. Tell your kids about a financial misstep you made. Explain how you remedied (or are working on) the situation.

4. Most importantly, start talking money now. And don’t let the conversation end.

Mistake #2: Letting them believe money is an unlimited resource. Most kids and many adults have trouble with the concept that there is a limited amount of money available to them, says Today show financial contributor and author of Money Rules Jean Chatzky.

“Make the choice to teach and show your children this,” she emphasizes.

Chatzky encourages parents to create a list of things they will no longer pay for, then to be sure the amount of allowance they give their children will not completely cover those purchases. Offer kids opportunities to do more than their regular chores to earn extra money, hopefully incentivizing earning and building work ethic.

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When the phone call comes that there’s no more money in the account, resist solving the problem with cash. As difficult as it may be to resist, don’t bail them out if it’s not an emergency. Turn the situation back over to the kids with questions like, “How are you going to handle that?” or “What do you think you’ll do differently next time?”

Mistake #3: Only letting your child watch you withdraw money. “Money is way too invisible,” Chatzky says, “especially with debit and credit cards. Kids don’t see us depositing money, only getting a pile of bills out of an ATM or throwing down a credit card.”

Chatzky advises explaining the basics. If your money comes in by check or direct deposit, walk your teens through the process.

“Show them how you put money in the bank so you have a reserve to draw from when you need it,” and this will make it all more tangible, says Chatzky.

Mistake #4: Fearing plastic. Using a card to make purchases is the norm, notes Chatzky. This makes it imperative to teach teens how to use swipe cards responsibly.

Chatzky sets up accounts for each of her own teenagers that are linked to her personal bank account.

“Give allowance to your teens electronically this way,” she counsels from her own experience. “Make deposits and teach them to track their purchases and balance online. You can also monitor them when you check your own account.”

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Many banks offer special accounts and programs for parents of teens who are interested in teaching their kids to spend wisely. Kids with smartphone access may also benefit from a budgeting app to see where all their allowance is going.

The most important aspect, Chatzky says, is to arm your kids well.

“Give them education and put the tools into their hands. Raise kids to use plastic wisely,” she insists.

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