Parents are advised to guide teenagers in managing earnings from summer jobs.

The 2026 State of Teen Financial Literacy report by Everfi, which surveyed 160,000 high school students, found that 60 percent of juniors and seniors feel only somewhat, a little, or not at all prepared to set up and follow a basic budget. More than half of these teens say they are underprepared to manage checking and savings balances without overdrawing.

Data indicate that 20 percent of teens cannot recognize or avoid online scams, according to the Federal Trade Commission.

Financial experts recommend that parents act as business partners, offering guidance without micromanaging purchases.

They suggest allowing teens to use their earnings for personal expenses such as movies or video games, while pointing out when spending limits other necessary items.

Parents can ask teens to contribute to household expenses including cellphone bills, transportation, or streaming subscriptions if the family does not rely on the income for essential needs.

Opening a custodial Roth IRA is presented as a way to promote long‑term savings; contributions may be matched by parents up to the 2026 IRS limit of $7,500.

Establishing a credit history can be introduced later through a secured credit card that requires a cash deposit and reports on‑time payments to credit bureaus.

Directing earnings toward a 529 plan is recommended to support college savings, especially when other funding is insufficient.

Transparency is emphasized; parents are encouraged to review bank balances with teens and discuss spending patterns.

Finally, the article asks whether parents should retain final authority over a teen’s spending decisions, inviting comments to colorofmoney@washpost.com.