The importance of a good budget

A piggy bank.

Your 14- to 18-year-olds are in the final stretch to entering adulthood. Even with all the challenges of the ‘teen years’, you still have the opportunity to shape their financial behaviour. Many teenagers have after-school jobs that are a great source of income, pride and responsibility. Your conversations with them can now be centred on making the best decisions about their money, needs and wants.

Paying themselves first

If your children have a part-time job, chat with them about creating a savings plan to help curb the temptation to spend all of their hard-earned money. Show them how saving, or paying yourself first — through a regular investment plan (RIP) — has helped you achieve your long-term goals. A CIBC surveyabout the age when kids begin to invest their money. Opens a new window in your browser. found that 15 is the average age when kids begin to invest their money. They can set up a RIP, in a high-interest savings account or mutual fund, to sock money away. They can use any leftover pay for the things they want.

Handling money wisely

Your teenagers need your guidance, even if they don’t show it. You can remind them what the difference is between a need and a want, teach them budgeting basics and how to save for more expensive items. This is also a great time to introduce the debit card — and how to use it sensibly.

Spending responsibly

Your kids are probably still too young to have a credit card, but it’s not too early to talk to them about debt in general. If you have a mortgage, you can explain how it works. For now, you likely want them to know that it’s better to purchase something if they have the money to pay for it and to resist impulse purchases.

Budgeting 101

Budgeting involves creating a plan on how to spend money and sticking to it. A budget helps ensure your teenagers pay themselves first, so they don’t overspend. Introduce this budget calculator tool and get your teens thinking about and planning for their future. Your kids can also track their income, savings and spending in real time using the CIBC Mobile Banking App®.

A calculator.

You know your kids best. Tailor these activities to your family’s needs. Your teens benefit from having adult conversations with you about money and finances, and it demonstrates that you trust them.