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empower your kids to manage their money early on

High School means a lot of new experiences for kids. Learning not just lessons inside the classroom, but life lessons too. Being a teenager is not one of the easiest life phases, most of us will agree, and for many it is fraught with anxiety and hormonal swings. There's so much for kids to learn during their high school years that it can be easy for parents to miss one very crucial thing. Understanding money and how to manage spending it responsibly. There’s an increased awareness of consumerism (think fashion and electronic gadgets and wanting to keep up with their friends), and the increased need for access to cash (be it pocket money or earnings) to spend on socialising and shopping. And while they will learn valuable lessons through making mistakes with money, as their parent you can help to minimise their mistakes and instead empower them to see the true value of being financially free.  

Phone Home: 

Mobile phones can be a wonderful way for parents to feel less anxious about their kids growing up, knowing they can contact them any time if needed, and vice versa, particularly in emergencies. But mobiles also bring with them added expense, and new responsibilities. if kids aren’t educated sufficiently on how easily a phone bill can add up, then both you and your child are going to learn the hard way. Help your child to learn how to manage their phone use so they don’t use up their credit too quickly or acquire massive bills. Teach them how texts, calls and downloads all cost money and start with a pre-paid plan with a monthly limit. Show them how they can track their spending and encourage them to limit their phone use.  Download itemised bills to understand the charges. Help them to appreciate that having access to a mobile is in many ways a luxury and its something that costs the family money. Once your child gets a job discuss how they can start contributing to the cost of their phone bill. 

Access to their Own Account:

Most children have their own bank account by the time they are in high school, though many may not have ever accessed their funds. Many bank accounts allow children to have access to a debit card attached to their account once they are aged 12 or over, meaning once in high school many kids can access their childhood savings.  If your child is yet to open their own account, you might like to consider opening a Young Saver Account from Endeavour.  It is a 'kids only' account for children aged up to 17, and offers a competitive interest rate, access to financial education through competitions and promotions and is fee free. Help your child to understand that when they withdraw money from that account, their savings balance will reduce, and help them to work towards savings goals so they can also learn to replenish their bank balance. Chat about having a weekly or monthly spending budget to help manage spending and keep savings healthy. Go through your child’s bank records monthly to discuss the various transactions.  Many kids get a part time or casual job once in highschool too, so help them to get into the habit of putting aside some of their earnings for long term goals.   

Shopping Online: 

Online shopping is part of modern life whether we like it or not.  What may have been a pipe dream for us when we were kids, is suddenly within reach for today’s kids thanks to the internet and a debit or credit card. Help your children to be mindful about their purchases, discussing not only value for money, but also the difference between ‘needs’ and ‘wants’.  Also take the time to educate them about their role as a consumer and and the impact their purchase may have (ie shopping locally vs overseas, sourcing sustainable and ethical products over mass produced). Negotiating spending with a teenager will have its challenges but if you can educate them to be a responsible consumer today, they will (eventually) be thanking you for helping them with such an important life skill.

Online shopping is also an excellent opportunity to discuss the difference between buying something on credit vs their own funds. Remind them that credit is borrowed money which they need to pay back plus interest. While most high school children aren’t ready for a credit card, you can help them to understand the idea of paying back a loan by lending them money yourself which they have to repay in instalments.
Make sure you discuss online shopping security too, and educate them about secure sites and secure payment gateways to avoid a financial fright down the track.

Teenagers are guaranteed to waste money on impulsive buys, overspend on their mobile bill at least once, and whittle down their savings as they discover the art of self control and withstanding peer pressure. But its all in the learning, and these instances can be great opportunities to discuss the need to keep money aside for emergencies and necessities as well as to work towards financial goals. Encourage them to put aside money regularly into an online savings account so they can begin their adult life with a solid financial foundation.  Perhaps they’ll even shout you for a coffee every now and then if you’re lucky.

Alison Gallagher is a freelance writer, resourcefulness expert and entrepreneur. She has been featured in various publications including Stellar Magazine, Australian Health and Fitness Magazine, and Cleo Magazine. Alison is particularly passionate about sharing practical tips on how to live simply, sustainably and seasonally.