The Center for Financial Empowerment, the nonprofit organization founded by SCE Credit Union, has a mission to educate high school youth with personal finance concepts, preparing them to make smart financial decisions as they move into adulthood. As part of that mission, we encourage parents to take an active role in helping their teens establish strong financial habits for managing money.

The third post in our “Teach Your Teen” series is perhaps the most foundational skill for future financial success.

Teach your teen to have a savings habit

Let’s face it… spending money is way more fun than saving it. This is especially true for young people, who often can’t wait to spend money as soon as they receive it. Resisting the urge for immediate gratification is a discipline that must be taught as children grow up. Granted, some kids learn this skill better than others, but the data is clear: young people who learn to delay gratification become more successful adults.

The habit of saving money is a form of delayed gratification. It requires a conscious choice to do without something you want now, setting aside money for a future purpose instead. If a person isn’t used to doing this, it can be difficult – the money burns a hole in your pocket. But with frequent practice, it becomes less difficult with repetition.

That’s why we teach teens to make saving a habit every single time they receive money. At their age, the goal is simply to establish the habit. Once they develop the habit of saving a little every time, it becomes easier and less forced to do.

The benefit of early habits

Another fact of human nature is habits are hard to break, and bad habits are especially hard to break! The old saying “you can’t teach an old dog new tricks” rings true. So when we allow ourselves to develop unhealthy financial habits, it’s going to be much harder to break those habits and relearn positive money habits later.

Parents can do their kids a huge favor by helping them establish positive money habits early in life. When a teen learns to save money from every allowance, side job, and birthday gifts, the power of habitual behavior ensures they’ll most likely do the same when they start earning a paycheck. The habit of saving, established early in life, will set them up for financial success in adulthood.

What to do

Every savings plan should include three categories, even for teens:

Emergencies – Always have a “cushion” for when the unexpected happens
Retirement – Start as early as possible and unleash the power of compound interest!
Financial goals – Any future purchase  you’ll want to make (prom, car, home, vacations, etc.)

With some intentional action, parents can help their teens establish a savings habit.

  1. Make sure your teen has their own savings account. SCE Credit Union has free youth savings accounts we can set up in your teen’s name, with you, the parent as joint account holder. Receiving money transfers from mom and dad is easy, and with Online Banking and the mobile app your teen can view their account activity. Check out The Teen Scene!
  2. Give your teen frequent opportunities to save. Establishing a habit requires doing the desired action repeatedly, so your teen must receive money on a regular basis in order to build a habit of saving. Setting a weekly allowance, or paying your teen for regular chores like babysitting or lawn mowing are great ways to do this.
  3. Help them set savings goals. Challenge your teen to decide what they’re saving for, and how much. For instance, “I want to set aside $200 for emergencies by October 1,” or “I want to save $500 to spend on senior year activities by the end of summer break.”
  4. Use visuals to track savings. Believe it or not, having a visual reminder of savings progress helps to maintain your teen’s habit-building motivation. We recommend going old-school: Print out a savings “thermometer” graphic your teen can tape to the wall and color in with a marker every time progress is made.
  5. Add some extra incentives. Reward your teen’s positive savings habits by offering to match their savings or give bonuses. For instance, “If you save $250 for this goal, I’ll match it with $250.” Or for a larger goal, “When you reach 50% of the goal, I’ll put in a bonus deposit of $100.”
  6. Cheer them on. Praise for positive behavior goes a long way!
Help us empower the next generation for financial success! 
The Center for Financial Empowerment is a 501c3 nonprofit organization whose mission is to empower disadvantaged youth through financial literacy education. Find out more about our work at