Teaching teenagers about earning and spending
We explore how exposure to online purchases is impacting the value children place on their pocket money.
When our children move into their teens they become more independent in their spending. And while they still rely on us for most of the funds to support their day-to-day needs, they may also be supplementing this with income from a casual job.
As parents, we can help guide and encourage them to manage their money responsibly; both in short term spending decisions and in long term savings.
Here are my tips to guide your teen to make more considered spending choices.
Help your teen manage the money they have coming in
Getting a first job will be a pivotal moment for your teen. It may be the first time in their lives that they’re earning money for themselves, so balancing saving with their day-to-day costs from the outset will be key to developing good habits. If they want to save up for an end of school trip but seem to be spending too much on other things, sit down with your teenager and develop a comprehensive but flexible budget that allows them to save but still enjoy the money they’ve earned. It’s important to give a little bit of leeway for the things they want but emphasise the importance of long-term savings goals.
Talk to them about responsible spending
Limiting spending might not be as exciting to your teen as splurging on a desirable item but it’s important to inspire your teen to control their expenses so they can save more. In many cases, you’ll find that the appeal of long-term saving is quite strong when you simply remind them of their goal. If they’re saving for a car but love spending on fashion, comparing the benefits of each purchase side by side will almost always favour the long-term saving goal. In this instance, it’s the parent’s role to be the voice of reason encouraging responsible spending and saving money for needs instead of wants.
Use your experience to put an item they want to buy into perspective. Expensive jewellery might seem like a good purchase at the time, but if they know that it’ll take three weeks of work at their job or a month’s worth of chores to afford, maybe they’ll think twice before buying it.
Visit The Beanstalk for more tips and tricks on teaching your kids about money.