Money isn’t anyone’s favorite topic in this era of recession-busted bank accounts. Even so, if you’re like most families, your teenager probably knows next to nil about handling the till. It’s a fact: Fewer than half of all teens report knowing how to budget money, and only about a third know how to pay bills, according to a recent Charles Schwab survey. “Teenagers will eventually face far more complicated money issues than their parents did, and they want parental help to learn finance,” says financial expert Carrie Schwab-Pomerantz, president of the Charles Schwab Foundation. That’s your cue: Use allowance to coach your kid on budgeting, says Schwab-Pomerantz. Have her write down all her expenditures so she can see where her money is going and then plan her spending accordingly. “If you think she’s mature enough, you could offer her a credit card linked to your own account, with a low maximum,” she suggests. This way she can learn to stick to a budget and use credit responsibly, since she’ll only be able to spend up to the allotted amount. She can also practice paying the bill, which will help her understand how fees and interest can accrue—something you can urge her to avoid. In the process, you might sharpen your own spending habits a bit—can’t hurt.

Super Saving Ideas

Share these smart tips with your teen: Sock some away. Encourage her to put aside a percentage of what she gets or earns. This will help create a habit of saving some, not spending all, says Carrie Schwab-Pomerantz. Keep a balance sheet. Have her write down her expenses and track spending against her money allotment. She should cross-check to see how much she’s spending and when, so she can plan for saving. Go to work. Encourage her to seek afterschool or summer employment—even babysitting. Kids with jobs are more likely to become savers since they experience the value of hard-earned money.