You’ll need to update your browser so you can continue to log on to your online banking from 28th February. Update now.



Setting suitable savings goals with your teen

Setting suitable savings goals with your teen

Chances are, when your child reaches their teenage years they will get their first ‘real world’ job.

Whether that's waiting tables, answering phones or working in a shop, it may well be the first time they experience the reward of buying things with their own hard-earned cash.

It's difficult sometimes to guide teens towards sensible spending choices and achievable savings goals. So how do you help your teens create a realistic savings plan, and stick to it?

1. Keep them motivated

While savings goals are so rewarding when you reach them, the process can feel challenging at times. A great strategy to keep teens motivated with a long-term savings plan is to build in some rewards along the way. For example, if they're saving $50 a week for a $600 holiday, tell them that when they reach a significant milestone, such as $300, they can spend the next week’s $50 on something else they really want. It might push the holiday savings goal out a little, but they'll be more likely to stay on track.

2. Put spending into perspective

Showing teenagers what they can get for a similar amount of money can give perspective and help them make responsible saving and spending decisions. Say they are going through a movie phase. You could show them that 10 trips to the cinema and/or cafe could have bought them that video game or pair of shoes they were after. Similarly, if you chat to them about the time it would take to earn the money or save for their games or clothes, you're helping to influence their spending choices in a positive way.

3. Map out additional costs

Sometimes, the things our teenagers want to buy are not just a one-off expense. Cars for example are something many teenagers aspire to own but they don't think about the ongoing associated costs such as petrol, insurance and servicing. It would be worthwhile helping them map out any costs they won't have thought of so there are no financial surprises down the track.

4. Encourage independence

The best way to help your teenager make responsible spending decisions is to encourage them to use their own money whenever possible. This will give them the confidence to manage their money, with your guidance, and develop positive financial habits that will last well into adulthood.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.