Learning how to take care of money at a young age can help your teen through to adulthood.
Taking care of money is a valuable life skill for anyone. Here are a few ways you can help your teen to manage their money responsibly.
A lot of us don’t like to talk about money but having open discussions about it can teach your teen some essential lessons. Ask them questions and listen to their responses. They might know more than you thought; or this could be your chance to correct any assumptions they’ve made.
If your child has always accompanied you to get groceries, now is the perfect time to turn it into a lesson. Show your teen how you choose which products to buy, how to make the most of money-off deals, and how to spot a deal that looks better than it actually is. Show them how to compare the cost per 100g, rather than only looking at the written price. Explain how you decide whether to splash out on a more expensive product or choose something cheaper (but just as good).
If your teen is a little older, they may be thinking about moving out or going to university soon. The very idea of utility bills and council tax may seem dauting, but it’s actually quite easy to set up new accounts. Show them how to compare different energy or Wi-Fi tariffs when your contract comes to an end, and work out what kind of saving/budgeting structure will work best for them.
A part-time job can be a great way for teens to increase their confidence, make new friends and add to their CV. Not to mention that first real paycheque. Earning their own money can often be the first step to teen financial responsibility, because they had to put their time and energy into it. Remember to explain about tax and National Insurance contributions, or your teen could have a shock come payday!
If your teen has their own money, either through a part-time job or pocket money, they’ll need to learn how to allocate it. Perhaps they’d like a new pair of shoes, but they also want to go out for dinner with their friends at the weekend. Budgeting their money into separate ‘pots’ might work for your teen, with a pot of money allocated to socialising, one to save for a certain item, and another pot for rainy day savings.
This can be as simple as separate, labelled jars in their bedroom, or on an app. Prepaid debit cards, such as GoHenry or Monzo, allow your teen to separate their money into digital pots and see their available funds at a glance.
If your teen has a part time job, working out how many hours it will take them to save for something special is a good way to decide if it’s worth it. They might decide that ten hours is too much for one video game or bag. On the other hand, it could be worth it to them in the long run, especially if they play the game / use the item for months and years to come.
Learning how to manage money takes time and practice, it can also be rewarding in the long run.