Ages 11-13

Financial Literacy for Tweens

The tween years bring important financial lessons and likely some challenges too. The foundation of life and money lessons you’ve taught your kids are essential in these next few years. So too are honest and consistent messages that recognize your kids’ views, while maintaining and supporting your core values. The primary thing that kids want at this age is to be viewed as young adults. Promoting greater financial maturity and more independent financial decisions can be a win-win for the whole household.

Key Money Basics for Ages 11-13

  • Developing budgeting skills and more responsible money behavior by shifting to a bi-weekly allowance, paid virtually.
  • Valuing the role of working through small jobs near home.
  • Conceptualizing and planning for longer-term spending and saving goals using kid-focused financial technology.
  • Learning the importance of giving to others.
  • Broadening online and other banking skills.
  • Learning how to get out of debt through small loans.


Adapt to Mounting Peer Pressure

Peer pressure is intensifying and it only builds from here. The best thing you can do is to continue setting good examples for your kids and try to find an approach that recognizes their viewpoints, while also supporting family values.

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  • Encourage your kids to discuss requests rationally. Try to meet them halfway sometimes. When you do say “No,” explain why and how your decisions relate to family values and what’s important e.g., a college education, family experiences, philanthropy, etc.
  • Focus on how your kids are unique in non-material ways, such as their talents or personal qualities.
  • Your kids are now prime targets for marketing campaigns. Discuss how marketing and branding aims to encourage spending. Focus on how to make wise purchase decisions.
    • If your kids want to buy designer or label items, consider making them use their own money (from their allowance or earnings) to pay the cost differential. This helps your kids to learn about the cost premium of more expensive items.
    • If your kids always want to be the first to have a new technology item, explain that smart consumers sometimes let other people buy things first, letting them be the guinea pig to see if it works well.

Expand Purchase Responsibilities

It’s time for more responsibility, preparing for bigger decisions in high school. Move gradually, layering on responsibility for items like clothing. Stay involved, give guidance and remember your kids still have to listen even if they don’t want to.

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  • It’s time to modestly ratchet up the allowance to reflect bigger responsibilities. Make sure their purchase responsibilities include both needs and wants at this point, and discuss the difference between the two.
  • Expand the day-to-day purchases your kids are responsible for, such as experiences with friends, entertainment, dining out, etc. Clothing purchases are a common transition item at this age. Your input is still required, but some latitude and freedom allows for valuable learning opportunities.
    • Either establish a back-to-school budget for one month, or encourage your kids to add to their wardrobe throughout the year from their recurring allowance.
    • Work with your kids to come up with a list of essentials they need to buy.
    • Create a budget based upon the list of what they need. A kid-friendly online app can be a helpful tool for developing and monitoring your kid’s budget. 
    • Go to the mall or look online together. Evaluate options by browsing first before buying. This encourages comparison shopping to get the best value, and helps your kids stay within their assigned budget. Comparison shopping apps can help, supporting digital financial learning as well as wise decision-making.
    • Set guidelines on permitted styles as necessary.
  • Plan together for larger spending goals. Examples might include sporting activities, vacation splurges, or extra spending money for the summer months.
  • Explore online tools that might help your kids to monitor their spending.
  • Your kids are growing up, but they still need your input. Continue to provide financial guidance.
    • Give guidance on making wise purchase decisions based upon price, value, quality, needs versus wants, what you can afford, and family values.
    • Discuss branded goods and why it’s often a good idea to avoid the hype.
    • Encourage success and frame mistakes as opportunities to learn and grow.
  • One of the best ways to teach budgeting lessons is to avoid bailouts.
    • If your kids run out of money, encourage them to work to earn the money they need.
    • Encourage free activities when allowance money is spent too quickly.
    • You might consider extending one or two loans a year. This can help your kids to learn about loans, credit, and how to get out of debt if they borrow.

Promote Budgeting Through a Bi-Weekly Allowance

Begin paying your kids their allowance once every two weeks, thereby requiring stronger budgeting skills and more mature decisions. Raise the allowance to cover more independent purchases, but keep it modest to provide latitude for larger amounts in high school.

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  • There’s no precise amount for how much allowance you should pay. The best number is one that recognizes:
    • How much things cost.
    • How much allowance your child is capable of sensibly managing.
    • A progression that helps to gradually prepare your kids for adult financial responsibilities, with budgets that are realistic for them to eventually afford.
    • Core family values and beliefs.
    • Additional amounts your children are earning from part-time work.
  • The amount of allowance you choose to provide should be adequate to cover:
    • Basic purchase needs for which your kids are now responsible.
    • Some amount for discretionary spending.
    • Some amount for savings, including longer-term goals.
    • Some amount for giving, in line with your family values.
  • By now, allowances should be paid virtually, ideally directly into your tween or teen’s custodial account. This helps build familiarity with online banking functions and digital money management.
  • Work together to develop a budget that guides the amount of the allowance and that helps your kids make it last. Use one of the many kid-friendly online tools that facilitate budget monitoring.
  • One of the best ways to teach budgeting lessons is to avoid bailouts. Encourage extra work for extra income, free activities, or even to pay off an occasional loan.
  • Be sure to review the allowance every year; your child’s birthday is a perfect opportunity. Increase the allowance to account for increased financial responsibilities for independent purchases.

Encourage Neighborhood Jobs

Kids can’t formally work until age 14, but there are plenty of experiences close to home that offer income for savings, splurges, and valuable life lessons. Working helps kids develop a stronger sense of personal and financial responsibility.

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  • Encourage your kids to think of jobs to earn extra dollars. Examples of jobs at or near home include babysitting, being a kitchen helper, raking leaves, pulling weeds, washing cars, pet sitting, etc.
  • Money earned can cover allowance shortfalls if your kids overspend their budget and run out of money too quickly. If they don’t have it, they can earn it.
  • Encourage your children to save extra earnings for special purchases and longer-term savings. At the very least, some amount of their earnings should always be allocated to saving and giving.

Set Longer-Term Saving Objectives

Your kids are ready to start thinking longer-term about savings, including preparing for college. Remember to make saving fun and rewarding, not just obligatory. This means setting aside savings for short-term rewards and future objectives.

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  • Work with your children to set one or two big goals a year such as saving for a special activity. Most financial technology apps for kids include goal-oriented saving to help track progress towards savings objectives. If you support the goal, consider instituting a matching program.
  • Ideally, at least a portion of any cash earned from odd jobs should be deposited straight into your child’s bank account as savings.
  • An important decision at this age is whether you want to encourage savings for a future car purchase. There are a number of important factors to consider. The decision varies for every family.
  • If college is a goal, it’s time to make this a savings goal for your kids too. We strongly recommend this by the tween years, if not sooner. Even if you’re planning to pay for college, your kids should participate in saving for associated costs. It teaches them the importance of financial planning, saving in advance, and defines academic achievement as a notable goal.
  • Some parents set specific saving goals such as 10% to 30% of the allowance paid. The right amount for your children depends upon family goals and your financial circumstances. Bear in mind that if you set this type of limit, you’ll need to more closely monitor your kids’ saving to ensure they meet these goals.
  • When your kids express wants, refocus them on their saving goals.

Monitor Bank Balances Together

If your kids don’t yet have a bank account, establish one now. It’s an important step towards financial independence. Help your kids gain experience going to the bank to make cash deposits and withdrawals, and also help them navigate the basic functions of online banking.

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  • Many banks now have online tools specifically for kids. Ask your bank what they offer before opening an account.
  • View online balances and transactions together to help your kids learn how to monitor their bank balance, relative to current cash needs, short term goals, and longer term savings.
    • Establishing this shared banking experience now can help to keep you in the loop once your kids are teens.
    • For security reasons, it’s recommended that you retain the login information in your possession only for now.
  • Part of longer-term savings should include your child saving towards college. A separate account to hold college savings is recommended, as it provides separation between shorter- and longer-term savings goals.

Align Giving with Family Values

If giving is central to your beliefs, this is a great age to inspire your kids to get involved. They’re old enough to appreciate the purpose of giving, and understand how philanthropy relates to shared personal and family values.

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  • One of the most important lessons is giving through direct involvement. An easy way to ensure this is to have your children give their time, money, or other resources to causes that you support, or charitable endeavors sponsored through their schools.
  • If you believe in financial giving, encourage your kids to set aside a portion of their allowance and earnings for this purpose.
  • It’s still best for your children to make contributions in person, so that they can see the smile and hear the thank you from the recipient.

Teach Your Kids How to Get Out of Debt

The notion of teaching your kids how to borrow should be unappealing. That said, teaching your kids about loans, how to get out of debt, and the benefits of staying debt-free are all valuable financial lessons.

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  • Consider extending a few loans over time, always with agreed-upon loan terms.
  • If you structure a loan, make sure it’s scheduled to be paid off in no more than 6 to 12 months.
  • Payments should be reasonable, but large enough to help your kids learn the impacts of borrowing.
  • You should still pay your kids their allowance as usual, then have them make loan repayments back to you. Don’t just deduct the payment from their allowance, unless they fail to pay you back, requiring action on your part.
  • Charging interest or executing a signed document is optional, but not necessary at this age.

Be Cognizant of the Lifestyle Your Kids Observe

The lifestyle choices that you and others make are now front and center in your kids’ eyes. Peer pressure is close to its peak, with your kids focused on numerous material items. Be mindful of setting realistic expectations for your kids’ future.

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  • Ask yourself if something is a need or a want, and what your kids are learning from your example.
  • Avoid negative comments about other people’s life choices, e.g., the car they drive, or the house they live in. Make sure that your actions and comments always support your individual and family values.
  • Always remember that the experiences your kids enjoy today become their baseline of expectations going forward. Ask yourself if it’s a realistic lifestyle to replicate for your kids, at the time when they leave home and beyond.

Speak and Act Wisely to Set a Good Example

Your kids might not want to admit that they’re still learning from you, but they are. Remember that you’re still the most important example in their lives and that your interactions with money set the stage for their future relationship with money.

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  • The best learning experiences draw from real life. Talk to your kids about your own financial decisions (trivial or significant), sharing your initial instincts, how you reached your decision, and the resulting outcome (both good and bad).
  • Maintain your position as a positive financial role model by learning about your own money personality, managing your money responsibly, and talking openly to your kids and others about financial topics, work, etc.
  • Continue to avoid extremes in how you react and relate to money. Being too stringent or too lax with aspects of your financial management will still have a lasting effect on how your kids view and interact with money now and as adults.

Remember to consider the wealth effect if you’re well-off. This involves being cognizant about the privileges your kids benefit from now and how these will carry forward into their adult lives.

Tech Savvy Tweens

By the late tween and early teen years, your child should have a firm grasp of basic money management, an ability to think conceptually, and be comfortable using technology. In combination, this makes it an ideal time to expand their understanding and use of financial technology in preparation for their digital future.

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  • Pay bi-weekly allowance directly into your kid’s bank account. Use a kid-friendly app and/or online banking functionality together to monitor account balances on a weekly basis.
    • Don’t share the login information with your kids just yet.
  • Explain the basics of how credit cards work, with a focus on the following:
    • Emphasize that credit cards simply delay payment, not avoid it altogether. Explain that you receive a bill each month and that you have to set funds aside to pay it in full if you want to avoid finance and interest charges.
    • Talk about credit card limits and how they relate to your income and what you can afford.
    • Discuss credit scores. A useful analogy is that a credit score is like a school grade but it’s determined by the credit card company, based upon how responsible you are with your money. Explain how a good credit score is financially helpful, allowing you to get a better interest rate on loans, or pay lower up-front deposits for things like utility services.
    • Consider authorizing a prepaid credit card, if you haven’t already done so. This expands financial independence and allows for cashless payment, while setting firm spending limits and allowing parental oversight.
  • Allow occasional online purchases, with supervision. At least initially, have your child go to the bank and withdraw the cash prior to making an online purchase. This helps establish the link between real money and electronic purchases.

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