Financial literacy for Teens

This post is also available in: Portuguese (Brazil), Spanish

By Catherine Blinder


After a long winter, many teenagers are looking forward to when school is out and indeed, they may be already looking for summer jobs. Along with the increased independence and feeling of self-worth that a job gives you, there is the additional responsibility of managing your money.

Although it may not be a large amount of income, it’s a great opportunity to learn skills that will help you when you are an adult and have more money to manage!

Needs and Wants:

The difference between a Need and a Want is a concept that even young children can understand, but as you get older, peer pressures change your perception of what a need and a want is, and your understanding of what a Need is becomes more complicated.

Essentially a Need is something we need in order to survive. And a Want is something we would like to have, but don’t need in order to survive. Some things we need, like air to breathe, don’t cost anything. But many do and those are the ones we’ll talk about.

Needs vary from family to family and from person to person. A small family can make do with a smaller car; a larger family may need a bigger car. We all need food to survive but we don’t really need soda, candy and ice cream to survive! You may need shoes, but not necessarily those $160.00 sneakers!


How can you achieve some of your Wants? By saving. Regular savings, even in low-interest savings accounts, will add up and enable you to enjoy the Wants and other financial goals you set for yourself.

When you are still living with your family, most, if not all of your Needs are provided. When you go out on your own, to college or a job, recognizing the difference between a Need and a Want will become more important, and especially more important to making long-term decisions about your hard-earned money. Even if you are only making $100.00 per week, having a budget and regular savings for short- and long-term goals will prepare you for when you are living on your own, and responsible for your own financial well-being.

If you can set short- and long-term goals – a short-term goal may be a concert that you’d like to attend in 5 weeks – and if you are able to save $15.00 from every paycheck, you will be able to save enough to achieve that goal. A long-term goal may be to buy a car and that may take a much longer time to achieve, but if you are committed to saving, and staying within your means, it will happen.


Setting up a bank account is the best way to manage your money. Banks and credit unions will work with you to set up an initial account and some will even match your first deposit. The easiest thing to do is to have your family help you open a savings account at the bank they use, but it’s wise to shop around for the best introductory deals, interest rates, terms and conditions. Do your homework.

(You may even be able to save your family money by switching to a different bank or credit union!)

Many people use check-cashing services or pay day loan stores to get from one paycheck to another, but as we discussed in a previous column about those services, they are dangerous to begin to use. They are not regulated in the same way banks and credit unions are and they charge outrageous interest rates, sometimes upwards of 400 percent in annual interest rates. People often become caught in an endless cycle of borrowing to pay back the debt with interest every month.

If you can learn to budget and save at an early age, you will be much more likely to successfully manage your money as an adult. And imagine the satisfaction of saving enough to pay for part of your education, or buying that car or taking a vacation – you will know you did it thoughtfully through hard work and careful planning. And maybe you’ll actually budget and save for those $160.00 sneakers as a short-term goal!


This article was written by Catherine Blinder, chief education and outreach officer of the Department of Consumer Protection of the State of Connecticut. To learn more about how the Department of Consumer Protection can help, visit us online at



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