5 money mistakes teens make (and how to avoid them)

Navigating the world of personal finance can be tricky for teens. From managing allowances to understanding the value of saving, the journey to financial literacy is filled with learning opportunities. Let’s explore the most common money mistakes teens make and how to avoid them.

1. Not tracking spending

Not tracking spending is one of the most common money mistakes teens make. It often feels harmless because the purchases are typically pretty small—buying a snack, downloading an app, or grabbing coffee with friends. But without realizing it, those little expenses pile up fast. When teens aren’t paying attention to where their money goes, they end up wondering how their wallet or bank account emptied so quickly.

How to avoid it: The fix is simple—teens should get in the habit of checking their balance regularly and reviewing where their money has gone. It doesn’t have to be complicated; here are a few ways they can do it:

• Write it down in a notebook 

• Use the notes app on their phone

• Try a digital money management app like Greenlight, the #1 family finance and safety app, that tracks spending automatically 

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Once they can see where their money is actually going, it is a lot easier to make smarter decisions about what to buy next.

2. Ignoring the importance of saving

Not saving is another mistake that catches teens off guard. When you’re young, there are no big bills, rent, or major responsibilities yet, so saving might not feel like a priority. But, if they don’t save, they’re more likely to be unprepared when something important comes up, like replacing a broken phone or buying something they really want. 

How to avoid it: Start small—teens don’t need to save large amounts. They can get into the habit of setting aside just a little bit of every dollar they earn or receive, like 10% of anything that comes their way. Over time, those small amounts add up. Greenlight makes this even easier with automatic savings features that move money into savings before you even get the chance to spend it.

3. Falling for peer pressure spending

Falling for peer pressure spending is one of those sneaky habits that doesn’t always look like a mistake until it is too late. It is when teens feel the need to buy something just because everyone else is. Whether it is the latest shoes, gadgets, or constant trips to get coffee or snacks, it adds up fast. It is not always about wanting the item itself—it’s about feeling included.

How to avoid it: Teens should focus on their own financial goals. What do they actually want to spend money on? What matters to them? When they have clear goals, whether it is saving for a new phone, a concert, or even just building a savings cushion, it is a lot easier to say no to spending just to keep up. 

4. Not setting financial goals

Not setting financial goals can lead to money that disappears without anything to show for it. Without a plan, it is way too easy to blow money on random stuff and have nothing left when something your teen actually cares about comes along.

How to avoid it: The solution is surprisingly simple. Have your teen pick a goal—any goal. It could be saving for a big purchase, for college, for a trip, or even just for some future freedom. Have them write it down, track their progress, and watch how motivating it is to see their savings grow. Greenlight helps with this by letting teens create savings goals right in the app with visual trackers that make it feel like a real achievement every time you add money.

5. Overlooking the value of earning

Overlooking the value of earning means missing out on one of the best financial lessons there is: Understanding the connection between work and money. When teens only get money from gifts or allowances, it can start to feel like money just shows up, not something you actually have to work for.

How to avoid it: Create real earning opportunities for teens, such as:

• Assign chores around the house

• Help them find a summer job 

• Find ways for them to earn money in a virtual job from home, like online tutoring

Earning money helps teens understand how valuable it really is. Greenlight makes this super simple with its Chores & Allowance feature where parents can assign tasks, track completion, and pay teens right through the app. When money is tied to effort, it changes how teens think about spending, saving, and managing it.

Building habits that last

Helping teens build good money habits now leads to better choices later. Whether it is tracking spending, saving regularly, understanding credit, or learning how to earn, these lessons stick. When families practice these skills together, it sets teens up for confidence, independence, and long-term financial success.

Teach money skills for life. Kids learn by doing — and Greenlight’s all-in-one family app helps you weave money management into daily life. Try Greenlight, one month, risk-free.†

This blog post is provided "as is" and should not be relied upon as a substitute for professional advice. Some content in this post may have been created using artificial intelligence; however, every blog post is reviewed by at least two human editors.