Encourage your teen to start saving now and you'll be teaching them a valuable skill - and you'll probably save yourself some money too!
We all know teens are expensive – as they become more independent they
want more clothes, gadgets like iPhones and laptops and want to go out
Encourage them to start saving now and you’ll be teaching
them a valuable skill (that they don’t learn in school) and allowing
them to spend their money on what they want (rather than you having to
foot the bill).
Follow these 9 tips to help your teenager earn, save and understand the value of money.
Before they can start saving, they need an income! Once they’re over 16 they’ll be able to get a part time job in a shop, restaurant or somewhere similar. Under 16s can also get a job, but there are more restrictions. Talk through the benefits of getting a job with your teen (such as being able to save up for something they really want and being able to go out with their friends more). Once they’ve got a job, discuss with them a sensible amount of money to put away each week or month.
Teenagers are too old for piggy banks – they need a proper bank account to deposit their savings in. Help them open one up – if they’re under 16 then they’ll be able to open a children’s bank account. Once over 16, they can open an ISA which is a tax free savings account. They can save up to £5,340 in an ISA, but if they withdraw money it can’t be redeposited.
Once they reach 17 there’s a good chance they’ll want to learn to drive. Driving lessons cost around £20 per hour or more, then they’ll need to pay for their theory test and their driving test (perhaps more than once). It’s a huge expense. On average, it takes 40 hours to learn to drive, so if you can take them out to practice (once they’ve had a few lessons) it’ll help to reduce that cost for them, but you’ll have to get them insured on your car, which may be costly.
If you can spare the cash, why not offer them an hourly wage for cleaning, tidying and ironing? Especially when the school holidays come around, teens tend to have lots of free time and a bit of money might give them an incentive to not spend all their time watching the TV. You’ll appreciate having a break from the housework too.
Being able to budget is one of the key skills needed for saving money, teach them now while their finances are simple and it’ll help them when they’re older and have more outgoings to manage.
We’re not suggesting that you get them organising all of your bills, but if you’re planning something like a family holiday within a budget, why not get them to help? It’ll help them to grasp how much it costs (and why you can’t afford to go to some exotic location every year), plus they’ll get satisfaction out of finding you a good bargain. This can work with smaller expenses like family days out too.
Offering to match some of what they save will be a great incentive for
them – and you could do this instead of giving them pocket money.
You probably give your teen money for things like school dinners and snacks, and they spend it without giving it a second’s thought. But have they ever added up how much £2 for every school day would cost for over a school year? (£380). Making them think about this will help them to understand how much little things can add up. Perhaps you could suggest that they switch to packed lunches instead and you’ll give them some of the difference.
Teens love their mobile phones so make sure they’re not spending more
than they need to. Pay as you go deals are a good idea as it means they
can’t run up big bills without realising. Lots of companies offer good
deals too – at the time of writing, Orange was offering 300 texts and
free internet access for just £10, Vodafone was offering 100 minutes,
300 texts 50MB of web access for £10, and T Mobile was offering
unlimited texts for £10. If you think your teen would benefit from a
contract, help them shop around for a good deal.