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Teaching secondary school kids to be responsible with money

Kate Anderson

Teaching your children about money is one of the most important things you can do as a parent. Once they are adults, they will be responsible for making their own money and creating their own budgets – and the seeds of how to do all of this should be sown as early as possible.

We have already covered some top tips and tricks for teaching primary school children about money, but how do you approach it with teenagers? Let’s take a look. 

Steady income

Firstly, think about providing your child with a steady income. Teenagers will not know how to handle their money unless they have some. By providing them with a monthly allowance, or by encouraging them to get a part-time job when they are old enough, you are enabling them to have their own money which will then become their responsibility.

Responsibility

Consider giving your child some financial responsibility. If they have their own money, they can then understand what it is like to budget and stretch their money to be able to afford what they need – not just what they want.

For example, you could give your teenager responsibility for financing their own social activities as part of their allowance. This will allow them to have the choice of going to the cinema with friends, or if they choose to spend all their money on something more extravagant like new trainers, realising they will have to miss out. 

One of the key things is to avoid is bailing them out. They need to get the message that once the money has gone, it has gone. The bank of mum and dad won’t be there to step in. This will reinforce the message that they can’t overspend and that the amount of money they have is limited.

Savings

It’s a great idea to start a savings habit early. One of the best things you can teach your children is how to save a portion of their own money, and build that into their budget.

One way to do this would be to help them set up a standing order with their current account. Then, when they receive their monthly allowance – or monthly pay if they have a job – a specified amount will automatically be put into a savings account.

Savings goals often help as well. For example, if your teenager wants to attend a music festival, research the cost of the ticket and set this as their savings goal. You might then choose to celebrate when they reach a savings target. Pizza out with friends, or a bonus allowance one month can go a long way towards encouraging them to keep up with their savings.

Budget

The idea of budgeting can be an elusive concept to teenagers. With few financial responsibilities in place, they may struggle to see the point. However, learning budgeting skills early on in life can be invaluable later on.

It could be beneficial to sit down with your child and talk through your budget. Explain what fixed costs are (e.g. mortgage payment, utility bills, council tax), how much is devoted to saving and what is left as disposable income. Then apply this to them. Do they have any fixed costs (e.g. their mobile phone bill)? What do they need to pay for this month (social activities, clothes, etc.)? And how much are they planning to save? Then they can see what they have left to spend.

Practical money skills

Money and financial products have their own language that a lot of us, even as adults, find difficult to understand. So teaching your child the basics, like the differences between a debit card and credit card, or what a personal loan is, could really help. The more you talk about the types of financial products we use in our everyday lives, the more equipped they will be when they need to use such products themselves.

If you feel comfortable doing so, consider sitting down and talking them through your payslip. Look at what your gross pay is, what deductions you have, and therefore what your take home pay is. Also, you could talk them through things like credit card bills and utility bills. Show them how they are broken down, and when a payment is due.

Children learn by watching their parents, even as teenagers. So maybe try sharing with them what you have to do financially, and try to set a good example. If they see you saving up towards something, and not just reaching for the credit card, they will more likely be inclined to do the same.

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