There are a number of things you can do in order to help your teenager become more financially independent. There are also a number of factors to consider from managing money to tax. We have put together the following tips for you to help prepare your teen as best as possible.

A Steady Income – The Start to Becoming Financially Independent

Having a job is an important part of being financially independent. While many teens will take up some sort of casual work from babysitting to mowing the lawn for a neighbour, having a “first job” is a big first step to independence. Teenagers can take up part time and casual work from the age of 14. Having a job helps teens understand the process of making and managing money.

When they apply for their first job they will need to register for a tax file number (TFN) otherwise their employer will be required to withhold up to 50% of their income in tax.

Managing Their New Income

When teenagers start work they find themselves with more money in their pocket than they are used to. Setting up a budget that fits their income will help them to understand that spending money at random is not a good approach. Creating a realistic budget can help to manage their income and set financial goals.

Encouraging your teenager to set financial goals is an important part of managing their new income. Creating a direct debit to a savings account can be a useful way of putting aside funds for a specific purchase or to simply save some money for the future.


When they start earning their own money, learning about spending that hard-earned cash wisely is a great way to become financially independent. This starts with avoiding the “impulse buy”; it is easy for teens (or anyone) who suddenly have more money, to spend their money on whatever they like without a second thought. However, the lessons of finding the best deal and weighing up the options that are out there can help your teen stop and think before each purchase.

You can encourage your teen to research the product online, read reviews or look at other stores before making the purchase. This helps to instill the message that every dollar earned should only be spent after research and thought has gone into it.

Another great tip for teens looking to be financially independent is to look at the “little spending”. This includes fast food, coffee, games and other seemingly small purchases that can add up over time. This type of spending has some value in that your teens learn to exercise control on what they are spending money on. Encouraging your teen to be aware of this kind of spending will help them to keep on track with their budget and their other financial goals.

While it is important to try to educate and prepare your teen financially as much as possible, many of these lessons will be learned the “hard way”. Letting your teen make their own mistakes will be an important part for them in becoming financially independent anyway!


Tax Free Threshold

If your teenager is earning less than $18 200 per annum they are not required to pay tax. Your teen must remember to claim the tax free threshold on their tax file number declaration that they provide to their employer. If they have more than one job, they should pick the job that they will earn the most money on to claim the tax free threshold, as they may only apply for the tax free threshold on one job.

Lodging A Tax Return

If the payment summary received from the employer at the end of the financial year shows that your teen is under the threshold but has paid tax, they can lodge a tax return to receive some or all of the money back. If your teen is under the age of 18 and has had PAYG tax deducted, you will need to lodge a tax return on their behalf. This will allow them to claim any refund owed. Your teen will need to have a tax file number before a tax return can be lodged on their behalf.


When to Talk to Us

It is never to early to start talking with a financial planner to get your teen thinking about their financial future. Have a chat to us about assisting with a budget plan or for advice for your teen about managing their money.

Tax time is a great time to introduce your teen to Moiler Wealth and as a part of your family we will ensure they are well looked after.

Contact us to book a time.