The following is a contributed post by Robbie Hyman, a Silicon Valley marketing writer and author of the book The Money Savvy Teen.
Imagine your 16-year-old daughter has just completed a beginner’s driving course with a driver-training school. The results are dismal. She failed, the school’s owner tells you, and it wasn’t close. Score: 38%. In fact, the owner adds, if your daughter retakes the course, it will be with a different instructor. The one who taught her has resigned and is leaving the profession altogether, citing his physical safety as the main reason.
Obviously, your daughter isn’t ready to drive, right? But now imagine your state’s Department of Motor Vehicles calls to tell you her score is good enough. After all, it means that almost 40 times out of a 100 she can get a car from A to B without hitting anything. Congratulations! She’ll be receiving a driver’s license in the mail soon.
Yes, that scenario is completely implausible, too ridiculous to be real. But something eerily similar and almost as dangerous happens every day with teenagers and credit cards.
We’re handing untrained teens a potential instrument of financial ruin.
Google “teen financial literacy stats,” and you’ll be horrified. To cite just one of a zillion examples, financial-services company TIAA tests people’s personal-finance knowledge each year and publishes the results. In 2025, Gen Z (which included not just teens but people in their late twenties) scored only 38%. (In case you’re wondering, adults didn’t fare much better: 49%.)
According to this study, the typical 17- or 18-year-old knows very little about budgeting, borrowing, saving, and managing debt. Yet that same teen is probably also getting offers for credit cards—tools that, if used irresponsibly, can get them into years or decades of debt. Congratulations! Your kid will be receiving her potential instrument of financial ruin in the mail soon.
3 Ways to Help Your Teen Create a Healthy Relationship with Money
A 2025 report from Experian finds Gen Z had an average $3,493 in credit card debt. And apparently most people aren’t getting out of this financial hole as they get older; Millennials had twice as much credit card debt: $6,961. Credit card misuse certainly isn’t the only danger of young people lacking basic financial literacy—but it is a scary illustration of the bigger problem.
The bigger problem, I’d argue, is that we’re not teaching young people to take a strategic approach to their financial lives in general. They’re not learning about the psychological triggers, like boredom or even depression, that could trigger their cravings to spend. They’re not learning to watch out for the $400 billion advertising industry and its ingenious tactics for separating consumers from their money. And we’re not equipping them with any strategies for navigating the complicated social issues surrounding money, like borrowing, lending, and spending out of peer pressure.
So, considering that you’ll have only so much time and attention to discuss smart money behaviors with your teen, try these unconventional but high-return strategies.
1. Share compelling stories about money-management mistakes.
Teenagers are expert lecture-sniffer-outers. The first sign a parent is launching into some Very Important Life Lesson can trigger an instant eye roll and temporary hearing impairment. So, if you want to pass on valuable personal-finance insights, turn them into interesting anecdotes. Nobody can resist a good story, not even a teenager.
Let’s say you want to teach your teen about why it’s self-destructive to over-spend just to keep up with their friends. You can tell them about this sad but kind of hilarious research finding.
While analysts at the Federal Reserve Bank were studying the effects of income differences among peers, this crazy fact emerged from their research. Turns out when someone wins a midsized lottery (say, a few hundred grand), that person’s neighbors are more likely to go bankrupt soon after. Why? Because the people living near the lotto winner suddenly feel the need to show off, to compete, so they spend more money than they can afford buying highly visible luxury goods, like cars and boats they can park in front of their homes.
That can start a fun conversation about how insane it would be to spend yourself into the poor house just because you wanted to pretend to your friends that you have more money than you do. Those types of stories and conversations tend to stick—and they generate very few eye rolls.
You might also like to read: How to Raise Teens with Strong Money Management Skills
2. Teach your teen to sniff out advertisers’ tricks.
We encounter 4,500 advertising messages every day. The more aware we are of these messages, especially the disguised ones, the more we can observe them clinically and not let the advertisers work around the rational centers of our brains and trigger our emotions to get us buying the stuff before we realize we don’t need it.
You can’t lecture your teen about the negative effects of advertising. (Not without the eye rolls and selective hearing loss.) So instead, try to make a game of it.
For example, take your teen to a movie or sit down for a TV show together, and set a contest to see who can spot the most product-placement ads in the content. Or show your teen a video ad and ask them if they can tell you which emotion the advertisers are trying to manipulate. Are they trying to convince viewers to feel aspirational (I can be like that actor!), or worried (Do my friends think I’m a loser)?
You can use these moments to jumpstart a broader conversation about the ad game. Ask your teen for the most creative or deceptive advertisements they’ve seen. Ask if they’ve heard their favorite influencers sneak ads into their podcasts. Ask if they’ve ever watched an award show where they were convinced the celebrity was getting paid to wear a designer’s clothes.
The more they talk and think about the ads they encounter everywhere, the more skilled teens will become at spotting them. And often, just being conscious of the fact that someone is trying to sell you something can take away most of the ad’s power.
3. Give your teen some standard phrases for tricky money conversations.
Has a friend or acquaintance ever asked your teen to borrow money? Has your teen ever felt pressured to spend while out with friends because everyone in the group was buying things? It’s worth asking your teen these questions.
If we don’t learn how to confront these difficult scenarios when we’re young, if we develop the habit of just saying yes because we can’t figure out how to say no in the moment, that could lead to more serious financial problems later in life.
Sure, a friend borrowing a few bucks from your teen isn’t necessarily a problem—although it can create difficulties over time if that “friend” fails to repay the loan and your teen becomes increasingly uncomfortable about it.
You may also like to read: Greenlight Debit Card – Teaching Teens How To Manage Money Made Easy
The real challenges here could be that, when your teen gets older, a persuasive or aggressive friend or acquaintance convinces them to invest in a business or loan a large amount of money—all because your teen never learned how to say no.
So, recommend some standard phrases for tricky situations like these. If someone asks to borrow money, your teen can respond by laying the responsibility elsewhere: “My parents made me promise I won’t lend money. Can’t go back on my word.”
And if their peers are spending and try to pressure your teen to follow along, you can suggest a different standard phrase: “I’m trying a new approach to money, spending only when I really want something. It’s working out well so far. I’m saving a lot and buying less junk.”
The earlier in life your teen learns how to handle these types of situations, the more equipped they’ll be at avoiding any bad money decisions just because someone put them on the spot.
This is a contributed piece by Robbie Hyman, author of The Money Savvy Teen: Building Smart Financial Habits That Will Last a Lifetime. In The Money Savvy Teen, Robbie Hyman looks to change that. Using an accessible approach, Hyman details how to develop a healthy relationship with money, the mechanics of money, and navigating the social side of money-an important yet often overlooked aspect of financial success. Filled with stories and humor, this bookfeatures simple, easy-to-remember lessons, from how to resist advertisers’ psychological tricks, to understanding the fees of using another bank’s ATM, to developing a standard phrase that can help anyone out of a tense moment when a friend asks to borrow money.
Parenting teens and tweens is a tough job, but you’re not alone. These posts might help:
Setting These 3 Boundaries Improved Everything with My Teens
Parents, Here’s How to Actually Stop Arguing with Your Oppositional Teen
An Unbearable Pressure Cooker: The Truth About Teen Stress Today
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