Teen’s Got Cents: financial advice for teens and their parents

As the teenage unemployment rate continues to fall (it’s now at 15.8%), more teens are working than in recent years, which means they’re making more money. However, many teens haven’t been taught how to manage their finances – yet.

To help teens (and those who love them) better manage their funds, Alliant spoke with Teens Got Cents financial blogger Eva Baker.

Baker, who is now 20, first started her blog five years ago after “being forced” to listen to a Dave Ramsey audiobook when in the car with her mother.

A financial blog’s origin story

“At 15, I was stuck listening to it in the car which … was thrilling … listening to this old guy talk about money. But, I became really interested in what he was talking about and the baby steps you can take to get out of debt and to start saving for retirement … and started to think about what this might mean for me,” Baker said.

She thought it was normal for parents to talk about money with their kids, but soon realized that wasn’t the case. She began to think of a lack of financial skills as the root cause for why college students (and grads) were accumulating debt they weren’t able to pay off.

“My original vision,” she says, “was to create this financial website, so that while I was growing up, I could share my money experience with teens -- so they, too, could have experience and knowledge before going out into the real world.

She’s received a positive reaction to Teens Got Cents, in the form of 10,000+ readers per month. The blog’s been so successful she now has five additional contributors and has written a saving-themed e-book. Baker thinks it’s because she avoids boring financial talk and instead chooses topics teens care about. She also focuses on topics she thinks will be relatable. Recent articles include, “Should you shop at thrift stores or retail stores” and “Should you bother with a high school resume?”

Teen Money Advice from a Financial Blogger

For adults, the most important mistake they make is assuming that teens don’t want to learn about money, Baker said.

“Adults look at teens and think, ‘Oh, they don’t care about money. They don’t want to learn about any of that stuff.’ And that’s just not true,” she said.

For teens, she lists her top three money smart tips as:

1. You have the power to control your finances.
2. You have to plan and be purposeful. Once you have the education, do something with it. Set a budget, whatever that looks like for you. I think it’s important to have conversations about money and not think you’ll deal with money when you’re an adult.
3. You have to save. Whenever I’m teaching teens, I tell them to save up for something in your future, whether that means a car or college. It’s good to always be thinking about your future.

The Best Banking Products for Teens?

Baker sees basic banking products, like checking and savings accounts, as a good start for teens to start learning about money. 

For those looking for more advanced products, Baker suggests setting up supplemental savings accounts, such as an emergency fund or longer-term savings, like for college. The important thing is to save something. For teens who feel like they can’t save, Baker wants her fellow teens to know she’s been there.

“I’ve been saving up for a car, and it felt discouraging to put $5 towards a car. I felt really stupid. But those small deposits add up quickly,” she said.  “It may seem ridiculous to put the $5 towards the car, so you might say, ‘Well, I’m just going to go to Starbucks.’ Don’t do that. Your small deposits will add up. It may feel discouraging, but keep doing it and be consistent. You’ll get there, eventually!”

How will she be funding that car beyond $5 deposits? Baker sees a car loan in her future. “Auto loans can be really helpful since a lot of teens can’t pay for cars all at once. For me, between banks and credit unions, I think credit unions often have better rates, so I’d start there.”

As for credit cards, “I think it depends on the family and the teen. If you can make that work in your family and you think it would be valuable, definitely go for it.”