Having the Essential Money Talk With Your Teenager

30.10.20 09:36 PM Comment(s) By Tony Ripley

(11 minute read)

Screenshot of my actual bank balances.

During a pre-marital counseling session, the couple shared with me that they've never seen their parent's bank statements.  I asked them, "Do you want to see mine?"  I wasn't showing off how wealthy I was.  I showed them my bank accounts to teach them how to budget using multiple savings accounts.


THEY WERE SO THANKFUL!  They'd never seen this before.


Money stress causes anxiety, marital conflict, fear, and even depression.  Eliminating debt and budgeting for recurring expenses are essential skills that everyone should learn from their parents in their teenage years.

In this article, I'll give you the tools for the critical money talk.  More importantly, if you're willing to take the time with it, this post will dive deeper into your relationship with money, opening a whole world of vital conversations for you and your family.


*Disclaimer.  I'm not a certified financial planner, a banker, a lawyer, or an economist.  I write these money-basics because they work, they're sound advice, and everyone needs to know them.  Having said that, you-do-you with your money.  Also, this article goes deeper into some money topics than I could find elsewhere.  If you want other basics, try here or here.

Vital conversations (for you and them)

  1. The budget talk (using my financials as an example)
  2. Your money taboos
  3. Having an emergency fund (Do you have one?)

The Budget Talk

AKA living debt free

AKA the bucket system

AKA multiple bank accounts

You create a budget when your bank account(s) have a conversation with your calendar.  It's as simple as imagining your foreseeable expenses and setting aside money for these expenses ahead of time. 

Do you remember piggy banks and quarter jars?  My parents put their change in the bowl at the end of each day, and surprise-surprise, they'd have enough for a vacation in two years.  


Today's problem:  Venmo doesn't leave quarters on your dresser.  


Solution:  Multiple bank accounts and automatic transfers.  Before I tell you how many bank accounts I have, did you know that you can set up accounts at most banks using their mobile app?  In real-time, you can click to add an account.  Also, you can name your accounts to keep track of them.  IMO, this is a banking choice essential.


I have 22 bank accounts with three banks.  Setting the business accounts aside leaves 16 bank accounts. 2 are checking, 14 are savings.  Why would I possibly have 14 savings accounts?  


Ten years ago, I hated the feeling of a hefty bill coming due, like insurance or an auto repair, and I was broke or in debt because of it.  (This always happened around Christmas!)  I hated going on vacation and saying "no" to fun stuff because I'd already overspent to get there.  I decided that I needed to get ahead of my expenses and multiple bank accounts with automatic transfers make this easy.


We all know that our car will someday need repair, that we will need to pay insurance, and that we'll want new furniture and clothes.  We all want to go on fancy vacations, buy Christmas and birthday presents for our loved ones, and support our favorite hobbies.  But do we plan for this?   I used to think that I'd have no fun spending money if I planned for everything because I wasn't spontaneous.  The opposite is true.  I have an immense sense of satisfaction when I pay from my savings because all my money dealings are worry-free.

Here's how it works


Necessity Budgeting

Car insurance costs about $1145 per year for my wife and me.  We're good drivers.  We also have to renew our vehicles' registrations each year, which costs $120 (2 cars)—total $1265.​

Every month, my bank app automatically transfers $106 from our main bank account to a separate savings account that we call Auto Insurance/Registration.  $106 x 12 = $1272; enough to cover the cost of insurance.  Since the money doesn't sit in my main bank account, I don't miss it.


I'll need new tires on each of our two cars every 60,000-80,000 miles.  We get oil changes every 5000 miles, and we save for these expenses every month.

Every month, my bank app automatically transfers $50 to the savings account we call Auto Maintenance and Tires. We can't determine the exact time of these costs since they are based on miles.  But we've learned that saving $50/month seems to cover it.


We're less sure when one of our cars will break down.  When they do, we'll need to fix or replace them. 

We plan for it by saving $100 a month with an auto-transfer to a bank account we call Auto Repair and New Car.

In all, we set aside $256 for our cars, and this doesn't count the cost of gas.  Gas and grocery expenses happen so frequently that they are never unexpected expenses.  When money was tighter, and we were paying down debt, we had savings accounts for social spending.  Now, as long as our checking account doesn't dip below our $1000 emergency cushion, we aren't meticulous about day-to-day expendatures.  If we drop below, we budget our spending until we become afloat.

Pleasure Budgeting

We love to travel.  Even during a year with meager incomes, we visited Barcelona and watched Messi play soccer.  How?  We set money aside for vacations.  We don't vacation frugally, but we might wait another month to ensure we have enough money and plan the best time of year to leave.  Budgeting is thinking long-term and making plans that fit your needs. 


If you like to be spontaneous, that's fine too.  Save knowing that you enjoy being spontaneous, and you'll have money waiting for you when you get the itch to spend.  Just be disciplined enough to draw money from the right bank accounts for its intended purpose.  If it's not there, don't spend.

Your Money Taboos

I could have started this post with this section.  Most people who value talking about money are blown away by the following discussion.  This conversation will cause you to share this post with a friend.


I was 30 when I started to look at my relationship with money.  I wrote about it in my book, On Success, and you can preview the first chapter.   The Money Chapter (not a bad title) could only be written after I'd uncovered my money narrative, earning the right to lead the conversation.  I'll start with the same questions posed to me by a great Canadian thinker, Henri Nouwen. 

To understand our relationship with money, we need to reach back to our relationship with our parents around money.  Take time with these questions; don't just blow by them.  If you want to unlock a new relationship with money, you must discover that you already have one.  Most people aren't aware they do.


How did your parents relate to money?  Did they ever talk about it openly?  Did they ever talk about it with you, or was this topic of conversation taboo?  Was money scarce or abundant?  Was their trust around the issue of money, or did your parents disagree about what to do with it?  Did they teach you how to handle money well?  Did they know themselves?

How do you handle money?  Do you have an emergency fund?  Do you spend money when you have it because you are afraid you might lose it?  What are your thoughts about saving, giving, or paying taxes?  Did you formulated these ideas for yourself, or have you inherited them?

How does money affect your self-esteem, your sense of worth?  Do you feel you’ll be more secure when you have more money?  If so, how much money is necessary? 

Do you relate money to freedom?  Have you been controlled with money?


We rarely speak about the emotional and even a spiritual element to money and amassing wealth. You are already coming to this blog with many well-developed attitudes about money that stem from early childhood.  If we’re aware of the origins of our disposition around money, we can change these attitudes to match our current maturity.


Will you break the taboo and talk about money?  With whom?  Pick someone you trust.

Emergency Funds - Have One

Following the advice in this blog will bring you financial peace of mind, and so will having an emergency fund.  An E fund is the first step to adulting. It's hard to refrain from spending every dollar in your pocket.  Many adults haven't learned to spend less than they make, so having an emergency fund is an act of emotional maturity. 

An unexpected expense (oh shit!) happens.  Decide now that you're going to earn enough money from your job, or your business startup if you're in a CREATE Club, that you can cover your needs and your wants.

Business professionals mentor CREATE Clubs students, and we've built into the curriculum some challenging questions about money.  It would be a disservice if we told students how to spend; however, it's irresponsible not to help students process their thoughts about money with open conversation.  


We teach students how to make money too!  You don't need to join a CREATE Club to make money.  Get a job or try a side-hustle to earn your spending cash.  Or, join a CREATE Club and learn all these lessons with your mentor.  


Parents, good luck with having great discussions, and please share your thoughts in the comments.

The CSF's purpose is to support students interested in entrepreneurship education by providing mentors and scholarships.  We share information about character development, helping students succeed in business and life. 

Anthony Ripley is a blogger, the author of On Success, and founder of CREATE Clubs, student Entrepreneurship and Character Development Clubs, now launching in the United States and Europe.  He lives in Round Rock, Texas, with his wife and two kids.

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