Teenagers & Making Decisions About Money: A Guide
14.05.2020 by Jim Ker
While 13 to 19-year-olds are undoubtedly becoming more tech-savvy and perhaps more independent as a result, one thing that hasn’t changed is a need for some friendly but vital money-related guidance – from parents, guardians, older sisters or brothers.
After all, money management isn’t often taught in schools, and the pressure to make decisions can be overwhelming.
It’s something the Save the Student site has touched on here, outlining 15 key money lessons that definitely should be taught in school.
In the piece, Owen Burek says teenagers should get ahead by learning more about how their money can work as hard as possible for them: ‘With today’s young people facing a tough economic climate, a tricky housing market and student debt, it’s more important than ever to swot up on your finance’. He’s right, you know.
He goes on to say students should be taught everything from how to make money last, to how much money you need to get by, how to haggle, how interest rates work, and even the dangers of debt.
Mental Health is as Vital as Ever
The start of 2020 has seen us all get used to a new ‘normal’, which means saving for the future could well be the last thing on your mind.
But it’s always good to talk – and now could be the time to sit down with your mum or dad, brother or sister and have a chat. Not just about money. We could all do with a friendly ear when times are tougher, with our mental health being just as important as our physical health.
Whether you want to talk about your future social plans, plan a stint travelling, discuss your options after school or have a conversation about money, it’s vital you have someone to lean on.
It’s worth writing down a list of your short-term and long-term goals, which will help you map out your plans for your immediate or long-term future, which may or may not involve a savings plan, too. After all, it’s always worth putting some money in a separate account each month, even if it’s just a small amount.
Want to use your free time wisely? Here are just a few important conversations you could have with someone close to you:
- Your plans after school or college – where would you like to be; do you want to go into further education, or would you prefer to enter full-time work, or even go travelling?
- How soon you envisage learning to drive – and if an older brother, sister or parent can lend their time and offer additional (and free) driving lessons. You could offer a favour in return, like an ‘I Owe You’ for a lift or two when you’ve passed. Or you could help around the house with the chores.
- The probability of owning your own home – and when. Chat to those closest to you about getting on the property ladder and how you might achieve this.
There could be a boost on the way to help you along…
Saving – for now, and the future – is key. It’ll also help you avoid the annoyance of unplanned expenses in the future – such as costly car repairs or the uni textbooks you didn’t contemplate needing.
While some of your friends may be ready to put plans in place for their future, you may need longer to consider your options.
Healthy conversations around finances may be more relevant than you think if you’re soon to turn 18, with Child Trust Funds (CTFs) starting to mature and due to pay out in a few months’ time.
What is a Child Trust Fund?
A Child Trust Fund (CTF) is a long-term tax-free savings account for children; you can’t apply for a new CTF anymore, as the scheme is now closed. If you have a CTF, though, you may be entitled to a lump sum payment in your name. This payment is made on your 18th birthday.
The accounts were offered by the Government to children born between 1 September 2002 and 2 January 2011. Kids received free cash vouchers of up to £250 (or £500 if your parents were on a low income) from the state, to be added to their CTF.
If you have one, you may have anything from hundreds to thousands of pounds. Your parents can help you find a CTF; not everyone has one, but there’s more information here if you need it.