More current account providers are starting to offer accounts to ‘tweenagers’ and teenagers, according to The Guardian. In some cases, younger teenagers will be able to have a basic ATM card so they can draw cash out and pay for goods at a few places, before upgrading to a proper debit card.
Young adults are also being encouraged to start saving, after the introduction of Junior ISAs (JISAs) three years ago for anyone in the UK under the age of 18. These work just like regular ISAs, so young people can start making tax-free savings of up to £4,000 in cash or stocks and shares (and parents and grandparents can contribute to these savings too).
Even if you don’t want your tweens or teens to get a bank or savings account just yet, you can still teach them about the value of managing money.
Managing their money
For your teenagers who are getting pocket money from you, put them on a monthly budget and make them responsible for certain payments – such as topping up their own mobile phone . Giving them £30 a month – or however much you decide – rather than a few quid here and there can make it easier for them to save and budget. They’ll quickly learn to manage their finances if they realise they’ve spent all their allowance in the first week and they won’t be getting any more until the end of the month.
Try to be as strict as you can with this – your teen will learn faster if they know you’re not going to keep giving them money just because they’ve wasted their entire month’s cash on computer games or clothes. Check out games or online tools that give your teenagers an introduction to money management, as this can help teach them the basics.
Learning to budget
It’s also important that your teenagers learn about the household budget when they’re old enough. For example, if you’re strapped for cash, let them know. It can be tough for teens as they may just think you’re being unfair when they beg you for an extra £20 and you can’t spare it. Instead, let them know that money is tight, and demonstrate that everyone in the family is on a strict budget.
When your tween or teen asks you about getting a big purchase such as a games console or a tablet, let them know you can’t afford to splash out hundreds of pounds for them. Help them work out a plan where they can save up part of their pocket money every week, part of their Christmas or birthday gift money, plus cash for any extra chores they’re willing to do. It’s important they learn that getting high-cost items isn’t instant – it takes time to save. As a reward for their hard work, you could offer to pay for some of the console.