Teaching your kids some simple money lessons can help to smooth out potential money hurdles down the track. Here are a few things to teach them once they hit their teenage years.
When they become teens
- Give them spending autonomy. Teenagers = EFTPOS. Chances are that once your child hits their teenage years, they’ll want their own EFTPOS card and some spending autonomy. Realistically, shopping for their own clothes, gadgets and accessories is something that they should be capable of doing ““ and it’s a great way to learn about the opportunity cost of money. So set a monthly budget to cover all these needs and transfer that regular amount to an eftpos-linked account that your child can manage.
- Ensure that they understand the cost of credit. While credit cards are (thankfully) not an option for your children at this stage, learning in advance about the high cost of those personal lines of credit might be enough to help them avoid it down the track!
- Encourage them to get a part-time job. By now, your kids will hopefully understand the concept that work = reward. Holding down a part-time job will help to reinforce it! It will also give them important experience in working with others, understanding workplace dynamics and providing good customer service.
- Educate them about online security. As if cyberbullying weren’t enough to navigate, kids also need to learn how to stay financially safe online. Netsafe has fantastic information and advice on keeping secure and avoiding scams.
Leaving school and home
- Reinforce living within their means. Being in charge of their clothes and recreational spending for a few years will hopefully have given your teens a good idea of how to budget. Reinforce that with them before they move out. Debit cards rather than credit cards, keeping up a regular savings plan, putting together a written budget ” they will thank you for nagging them ” one day!
- Make them aware of debt traps. It’s not only misuse of credit cards that can tip your kids into a debt spiral. Car loans, interest free purchases and hire packages can all drain their cash. Encourage them to learn more on the Commission for Financial Capability.
- Their rights at work. Starting a full time or permanent part-time job for the first time can be both exciting and overwhelming. Ensure that they understand what to expect! The government’s Ministry of Business, Innovation and Employment has some excellent general information available.
- Share house tips and traps. Moving out is also exciting and overwhelming ““ but ensure that your kids don’t get stuck with the communal bills! Having their name on the lease or utilities accounts could lump them with any accumulated debt.The government’s Sorted website has excellent information and resources to help your kids (and you) through the financial hurdles of various life stages.
- Tax, superannuation and other fun stuff is also outlined clearly and easily on sorted.org.nz. Sit down and go through it all with them.