Your teen may be turning 16 and preparing to take their driver’s license test. This is a significant milestone for both parent and child. Check out our tips on navigating how to help teach your kids about responsibility, accountability, and managing money.
Open joint bank accounts.
If your teen does not already have one or both, help your teen open a checking account as well as a savings account that you both can access. Encourage them to track their deposits, withdrawals, and any auto-transfers they may set up, such as a portion of their checking account money that goes into their savings. Teaching them how to manage their bank accounts will better prepare them for taking on a credit card (with you).
Take out a joint, low-limit credit card in the parent’s name and teen’s name.
Your teen can use the credit card for small purchases such as filling the car up with gas, or for an occasional trip to the grocery store. When the credit card statement arrives, the parent can go through the bill and match receipts with their teen to see which purchases were parent-related items, and which were not. The parent can then pay for their authorized purchases, such as trips to the grocery to buy chocolate chips so they could bake cookies together, and the latte treat or after-school snack would be the teen’s obligation. If they don’t have the cash, the amount can be deducted from the teen’s savings account to settle the bill.
Walk them through a W-4 and their first tax return.
Financial education is not limited to budgeting. You can also prepare your kids for the real world of finances by teaching them how to fill out their own tax forms. Sit with your teen and show them how to fill out their W-4 form. You can explain what tax withholdings are and why taxes come out of their paychecks. You may want to introduce the concept of keeping good records, especially for their potential tax refund or possibly owing money back.
Teaching your teens about financial responsibility is one of the best life skills you can give them before adulthood. Timing this message to coincide with the onset of a driver’s license is the perfect opportunity to start teaching your teens about finances as they take on more responsibilities.
The above does not constitute legal, tax, or financial advice. Please consult a licensed professional for recommendations applicable to your specific situation.
TRN00067; Rev. 10-2025
