Does your teen live by the financial philosophy of ‘buy it now’, and ‘somebody’ will pay for it later? Are they too young to have their own credit cards yet old enough to spend hundreds of euro online each year? Here’s 11 Money Management Tips for your Teen, brought to you by miDough.
Teens today are growing up a world where it will be harder for them to find secure jobs, where education and housing costs will create large debts and little scope for saving. So it is more important that ever to teach our teens financial responsibility.
1. Start Early
Children learn more from what you do rather than what you say.
- Shop with a list and stick to it, resisting impulse buys.
- Let your children see you saving towards treats or big ticket items be it a family day out, a new pair of shoes or a family holiday.
2. Regular Money Saving
Teach your teens the value of regular saving. Agree with them an appropriate savings plan, a fixed amount each week or month, which they will lodge to a secure account. Developing this habit could be one of the most important life skills you gift your teen.
3. Saving and Spending Patterns
Just as there is a time to save there is also a time to spend. Set realistic saving goals and spending limits for your teen. Let them see that saving their money gives them to freedom to purchase what they really want e.g. a laptop, some new clothes, or Christmas gifts for family and friends.
4. Promote Financial Independence
Teens strive for their independence, parents worry about their ability to cope with that independence. A secure personalized online money management system like miDough is a perfect solution. Parents can supervise top-ups to online wallets, set spending limits and teens can shop independently at a range of approved retailers.
5. Set and Stick to a Monthly Budget
Teach teens to live within their means, and that their income should not be their targeted spend. Cash birthday gifts can be regarded as the equivalent of a work bonus later in life. Not dependable regular income, but a welcome addition to the rainy day fund, or to put towards a larger investment purchase.
6. Card Fraud & Identity Theft
The issue of card fraud and identity theft amongst adults is widespread, but teenagers are even more at risk, as they simply do not have the experience to shop freely and unsupervised online.
miDough.com allows teenagers to shop online in a safe and secure environment, under the supervision of their parents or guardians. No credit card is required, and teenagers are kept within a secure environment of reputable retailers, meaning they cannot inadvertently buy from websites that have explicit content or offer unsafe products and services.
7. Manage on a Limited Budget
We all live on different incomes and budgets. Ensure your teen creates a positive attitude to and relationship with money. What you have does not define you, how you manage what you have may do. Teach your teen to take pride in their ability to manage on a limited budget, look for bargains in sales, or cheaper alternatives, or simply saying no, that particular expenditure is not justified.
8. Don’t Bail them Out!
The bank of Mum and Dad is a finite resource, and teens can’t expect their overspending to be rewarded with refunds from their parents. Teens need to understand that with freedom comes responsibility, and if they overspend they have to face the consequences – like no phone credit for a few weeks, or missing a night out with friends due to lack of funds.
9. Match Saving to Encourage the Savings Habit
If your resources allow, you can incentivise the savings habit by matching their savings at the end of each month or quarter. This can really encourage savers as they start out as they can see their savings grow more quickly and reach their targets more easily.
10. Get a Job!
Nothing will teach your teen about the value of money more that if they have to earn it themselves. It can sometimes be hard to find a job but encourage your teens to think outside the box and perhaps generate their own income. Do neighbours need gardens tidied, or their pets cared for, or are their opportunities for babysitting? If your teen is creative perhaps they can take a market stall selling their creations?
11. Teach the Art of Thrift
Teach your teen that value rarely lies in a price tag, true value lies in thoughtfulness and the time you give to a person or project.
- Reuse and re-purpose items e.g. dye tops or t-shirts, cut old jeans/trousers up to make shorts, add embellishments to clothes/runners to change appearance etc.
- Visit charity and second hand shops with them.
- Make thoughtful gifts for friends and family.
Teens have money, they know what they want, they want to buy online, but without a credit card, they can’t. miDough is a brilliant, simple, new system that makes life easier for teens and their parents. With miDough teens can take charge of their own money and online shopping through a transparent, parent monitored online solution. Less hassle for teens and less stress for parents!
It’s easy to set up, with no set-up fee or monthly charges, and money is protected in a secure bank account.
Any more tips to add? Let us know in the comments below.