Teenage financial problems range from small to quite serious. Here’s the heads up on 11 common and surprising teen money problems to work on.
You might think only adults have financial problems (or at least, serious ones). But it’s not true.
While many of these teenage financial problems won’t result in the kinds of consequences an adult would face – like losing a home or dinging their credit score – some of them can become quite serious if left without some sort of intervention, correction, or guidance.
Especially as your teen ages, and potentially takes the problem with them into young adulthood.
Let’s dive in.
Teenage Financial Problems
In no particular order, here’s a list of 11 teenage financial problems (some pretty common, and others a bit surprising).
1. Worrying about Financial Problems – Both their Own, and the Family’s
Do teenagers worry about money?
Take a look at these studies + findings:
- The 2020 Youth Economy Report included 59,006 American children ages 6-18 (who used the gohenry app + from a Censuswide Survey), and found that 51% of kids and teens worry about money.
- A 2018 Equifax study in the UK revealed that 65% of kids aged 8-16 worry about their families not having enough money.
- A 2021 Deloitte Global Millennial and Gen Z survey of 22,928 (8,273 were 9–24-year-olds) revealed 25% of Gen Z worried about unemployment.
When I think back to my own teen years, I can remember worrying about money.
My specific worries were:
- All the popular kids at school shop at these really expensive stores…will I ever be able to afford to do that? Can I get popular without having the clothes? (hint: I probably bought a total of 5 full-priced pieces as a teen from stores like Gap, Express, and Old Navy, from my own money – I still rarely shop at these stores or buy any piece of clothing at full price)
- How can my family afford to have me study abroad in Spain? I probably won’t get to go (hint: I did get to go – paying for it myself through mucking horse stalls, working our farm’s roadside stand, my aunt using her frequent flyer miles to pay for my flight, and earning a $1,000 travel scholarship)
- How will I ever afford to go to college? (hint: I went to a really nice, 4-year-school – Washington College)
2. Not Earning Enough (or Any) Money
While around 35% of teens aged 16-19 hold a summer job, I happen to know that there is a sub-set of teens who have no cash whatsoever.
That’s because I’ve heard from enough Moms and Dads who’ve told me that their teen is both not old enough to have a job, nor do they get paid to do chores and housework around the house (the rationale being that they, themselves, aren’t paid to do household chores, so why would they pay their children to do things – admittedly totally true!).
However, this means that some teens are stuck in a no-man’s land where the only cash they get is likely from birthdays, holidays, and occasionally skimming it off of sources like lunch money.
3. Spending Too Much Money
Teens spending too much money can manifest as a problem in a few different ways.
Maybe the parents (you!) are the ones who think they’re spending too much, when they don’t see it as a problem.
OR, maybe you’ve given them some money responsibilities to pay for with their money, and they’re consistently not able to because they’ve spent the money elsewhere.
OR, maybe the teen themselves think they’re spending too much because they can’t afford what they actually want to buy (nor can they ever seem to put any money towards their savings goal).
4. Trying to Keep Up with Friends in their Social Group
Teenagers are specifically wired to build a social group, try to fit into that social group, and to establish a place among their peers.
Money is a way for teens to express themselves – by what they buy, by how much they have, etc. – so it’s only natural that some teens would spend money to try and fit in.
This can be especially true if there’s a mismatch in earnings and spending habits among their peer group – where some teens earn a lot more through allowance or paychecks, or their parents pay for more of their wants and needs than you do.
5. Unhealthy Financial Relationships + Financial Abuse
Did your jaw drop when you read this headline? Mine did as well, when I first came across it.
But according to this study of 1,000 teens aged 13-18, nearly 1/3 of teens are in a romantic relationship with financial abuse warning signs.
An example is feeling pressured to lend money to their partner, with many of them not being paid back.
6. Not Respecting Other People’s Money
This shows up in several different ways. For one, it can show up in a teen demanding too much of the family’s resources or too much of their parent’s money, and seemingly not caring what they’re asking for.
Another way? Some teens steal money. If you have one that does this, you may not be shocked to hear it – but I was very surprised with all of the parents dealing with this after hearing about it off and on over the last few years.
This can also show up with the teen who borrows money from friends and family and promises to pay back, but has no intention or motivation to do so (and so the money never gets paid back).
7. Trouble Keeping Track of Money
This can show up in all sorts of ways.
Straight from parents, I’ve heard variations of:
- My teen loses their money
- My teen lends money to friends and doesn’t remember how much or when they’ll pay them back
- My teen doesn’t keep track of how much they’ve earned through chore commissions, and I’m constantly having to do this
8. Not Understanding Key Financial Skills
After teenagehood? Comes young adulthood. With bills, paychecks, and real-world money problems to take care of.
That’s why it’s so important that your teenager launch from the nest knowing how to manage their money.
Some common financial skills teens don’t quite understand yet:
- How to make change
- How to create a savings goal and save up for what they want or need
- How to juggle varying bill due dates and deadlines, on a bi-weekly paycheck
- What a healthy co-money-management situation with a partner looks like
- Basic bank management, such as using an ATM, depositing by mobile apps, shopping around for interest rates, etc.
- How to recognize financial scams and fraud
- Credit Report management
9. Being Thrown into Adult Financial Problems without Enough Experience
Some teenagers have to work to help support their households.
Some teens are in unhealthy financial relationships (pdf), where their partner is dictating how they use their money.
These are just two examples of adult financial situations a teen might be facing.
10. Angst over Getting their First Job
And the results were quite revealing.
Example problems for teens getting a job:
- Overcoming social anxiety
- Overcoming learning differences, and worrying about too fast-paced opportunities that tend to be available for teens (such as fast food restaurants)
- Not having transportation to get to work, and not having enough money to buy any until they start to work
- Busy schedule with sports, after school activities
- Keeping up with grades while also working
- Too few choices in a small town
- Safe working conditions
11. Having No Money in Savings
Some people (and teens) might think that saving money as a teen is a good-thing-to-do, but not a necessary thing to do.
But that’s not always the case. Especially depending on how much you’re okay with footing the bill from urgent and emergency-type situations.
As your teen gets older, they’ll take on more responsibilities at school, at work, and elsewhere. They might own a vehicle, or be responsible for equipment from school and sports, etc.
And with these increasing responsibilities, come increasing potential costs.
What happens if your teen gets a flat tire, and they have no savings to pay for it? Or if they lose a piece of sports equipment that belongs to their school?
Hint: true story – I lost my band tunic one year in high school, which turned out to be like an antique. I had to drain $328 from my savings to pay for it at the end of the school year. If I didn’t have that money, then my parents would’ve had to foot the bill.
They would need to come up with this money. Without any savings, that means these costs will fall back on the parents to pay.
Psst: check out this article on how much should I have saved by 18?
Teenage financial problems can be small, and ones that they’ll grow out of, or can be quite serious and they’ll need help to work on them. No matter which type of financial problems your own teen has, just make sure you let them know your ears are opened to listening without judging right off the bat. This will keep the lines of communication open between the two of you – which is far better than you being kept in the dark about what’s going on in their lives.
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