Saving Tips For Teens

All about allowances

The main reason for giving pocket money is to help children learn to manage money while they can be guided by elders. The age at which you start giving pocket money depends on how comfortable you are about your child handling money. However check what their friends' parents are doing so they don't feel too different.

Pocket money can help children feel that they are important members of the family because they are given part of the family's spending money. It helps children to make choices and to see that sometimes people have to wait and save up to get what they really want.

If the family can afford a small amount, even that works well to give the teenager a feeling of independence. If you are confident of your child’s spending habits, it is fine to give them money when they ask for it instead of a fixed amount. Some parents put part of children's pocket money in a bank account for them. Check that the bank does not charge any fees on this amount if you do this. Some parents give pocket money and ask the child to bank a portion regularly.

How much pocket money?

There is no special formula and how much will depend on a number of things.

What you can afford.

What the pocket money is expected to cover.

The 'going rate' among other families in similar circumstances to yours. Give what you can and ask them to fit their needs and wants into it. Incentives for chores around the house work well.

The amount of pocket money a child receives usually increases as the child gets older and takes more personal responsibility.

What should pocket money cover?

Don't tell them how to spend it. You can suggest but don't insist unless it is absolutely necessary. Let them learn through experience.

Allowance and teens

Teenagers are moving towards independence and it will help them if they have some practice in managing money while they still have your guidance. Depending on your teenager's maturity you might decide to give him a spending allowance to cover his entertainment costs and perhaps to buy his clothes.

If he makes a poor decision about something, it is a very good way for him to learn when he spends his own money. The first time in a difficult situation, he may run out of money and you may agree to help him out. Let him know that after that he must take the consequences.

Avoid always lending money and have your child owing money that may never be paid. Debts cause resentments and it might be easier to say 'No' in the first place. Gauge this with your understanding of your teen.

Older teenagers often have opportunities to earn some pocket money from part time work outside the home. How they use this money varies from family to family. In some families they may contribute something towards the family expenses or just use it for their own.

While you may want to say that the family money is not to be spent on certain things, for example, cigarettes, teenagers need to have some control of their money in order to learn to manage it.

Useful links

Interesting saving options are available on
www.savingsmart.com.au

This is a must see, it’s the website of the Financial Services Agency of Australia
www.fseaa.com.au 

This isn an informative website that will help to understand your money better
www.understandingmoney.gov.au

Don’t worry too much about raising children, take a look at
www.raisingchildren.net.au