Money management for teens
How to talk to teenagers about money
Tips and tricks to have better conversations about money with your teenage children
Want to help your teenagers get a handle on important money matters? Hear from a parent on the front line and other specialists, on ways to help them take control of their finances.
Teaching teenagers about money can be one of the most valuable lessons they’ll receive. But it’s not always the easiest subject to discuss, and there are various aspects to consider.
To help, we asked Jo Middleton, author of Playgroups & Prosecco and parent blogger behind Slummy Single Mummy, to explain how she got her teenagers up to speed in three areas – saving, earning money and fraud.
Plus, we’ve got additional suggestions from a financial education specialist, child psychologist and digital safety expert.
A typical tale of teens who don’t appreciate the value of money…
“A couple of weeks ago my daughter Belle and I were at my mum’s for Sunday lunch,” says Jo Middleton, parent blogger, author and mum of two.
“We were relaxing in the living room when Belle, who is 17, looked up from her phone expectantly.
'These are nice!' she said, showing me a pair of pyjamas on her phone. 'They are,' I said. 'You should put them on your birthday list.'
'But my birthday is six months away!' she moaned.
'Or you could get a job and buy them yourself,' added my mum brightly. ‘Great, thanks,’ said Belle, turning back to her phone, clearly disgruntled.
I’m sure it’s not just me who feels like teenagers don’t appreciate the value of money. There seems to be a feeling that money should just be provided, in the same way as meals!"
Set a clear savings target (and suggest a spending diary too)
A lot of teenagers really struggle in today’s world, says Jo. “In my experience, clear goals are key when it comes to savings, so encourage your teenager to focus on what exactly they are saving for and to create a realistic plan for how much they can afford to save.”
She suggests encouraging them to keep a spending diary to identify opportunities to save money. “Pinterest is full of fun savings challenges that teenagers will love, as well as crafty activities that can inspire saving, such as DIY ‘Give, Spend, Save’ jars, which encourage kids to start thinking about budgeting,” she says.
Why your own money experiences can help shape their habits for life
Fiona Montgomery, Head of Education – School Age, MyBnk, says: “At this age, teenagers are starting to better understand the difference between needs versus wants. They probably have more money, but they also probably have more outgoings. They are having to prioritise, but it’s probably not fully mastered at this age.
“In terms of saving, they are more aware of the need to save. And especially if they are earning money themselves. But their attitudes are down to the experiences and habits they’ve had earlier in life, and how parents have contributed to that. You can tell which students are really switched on, and it’s because they’ve had those conversations.”
Use real-life rewards for motivation
Teaching kids about the theory of money is important, but nothing reinforces it like real life experience, says Jo. “Bella was quiet on the way home from my mum’s house, clearly thinking about those pyjamas. Eventually I suggested that if she wanted to buy them herself, I could pay her to do some jobs around the house. I expected her to be reluctant but she jumped at the chance.
That week she worked really hard doing odd jobs, cleaning the house and organising the shed, and a week later there were the pyjamas, says Jo. “If you’re able to support your teenager in earning and managing their own cash then I believe that’s the best financial education you can give them.”
How a sense of freedom can boost understanding
Dr Elizabeth Kilbey, leading child psychologist, says: “At this age teenagers should definitely be able to handle their own money. You can begin by paying them to do jobs in the house, and as soon as possible get them into the reality of the financial world.
“Teenagers are super interested in money because at this age there’s a big developmental step – they might be learning to drive, or going out with friends more, so money and freedom become quite closely linked.
“There’s also a whole subculture of kids using resale websites. They’re seeing what they don’t need anymore, going online and selling it. These platforms provide a really good learning opportunity.”
For 16 and 17-year-olds, our Barclays Young Person’s account is another way to help them to take control of their money.
They can shop online and in store with a contactless debit card, as well as use Apple Pay and Contactless Mobile to buy things with their phone.
Openness can encourage conversation – and help protect against fraud
Jo says: “I’m a big believer in talking about money as openly as possible, and I think that a lot of the money problems we run into as adults come from an inability to talk about our finances.
“So, if your kids are showing an interest in your finances and how money works, then it pays (pun intended) to be as open as you can be in your answers.
“Creating a culture of openness around money also helps when it comes protecting your teenagers from online fraud, as it means they’re more likely to come to you with any concerns. Educating your teenagers about the risks is hugely important and there are a few basic principles they should definitely know.
“For starters, make sure they know that banks will never ask them to provide personal information online, over the phone or by text such as their PIN, PINsentry codes or passcodes.
“Any unsolicited or unexpected email or phone call should be approached with caution, especially if it’s asking them to take immediate action such as click on a link or open an attachment, or makes them feel rushed in any way.
“If your kids are in any doubt at all, let them know that they can come to you directly for help, or call the bank using the phone number on the back of their bank card to ask for advice.”
Explain why it pays to protect your bank details
Ross Martin, Cyber Security Lead for the Digital Eagles programme at Barclays, says: “There are a number of ways that parents can help educate teenagers, but first they may need to educate themselves on the importance of protecting personal and financial information.
“Parents can also proactively share their knowledge on a regular basis as new scams are always being developed, and discuss how to spot the tell-tale signs.
“It’s important to educate teenagers about when they should be cautious in sharing bank details, and encourage them to ask questions when they’re not sure about an email or text message. It can also be worthwhile discussing the consequences of falling victim to a scam, and how it could impact their future.”