Teaching children and young people about money is something that we believe very strongly about. We are grateful for this excellent guest post by author Chrissy Duncan.
Giving teenagers financial responsibility before they are 18 is important. It gives them experience in looking after their own money and dealing with banks whilst they are younger. They can do this without fear of getting into debt, or damaging their credit rating. They will be able to pick up good spending habits and learn about interest and savings.
Introducing teenagers to prepaid Cards
A prepaid card is a good way to start teach teenagers to be responsible with their money, and they can spend only within their limits. The card can be “loaded” with money via the website or an app, be this with wages or pocket money. There is no way that they can get overdrawn, or get into debt. You can use it to pay for things in the same way as using a credit card for purchases. An adult can apply for a prepaid card on behalf of a child from the age of 8 upwards, and they can also set spending limits and monitor usage if necessary.
Setting teenagers up with a bank account
Making sure that teenagers have a bank account is a good way to help them to use money responsibly. This is key to helping them understand about dealing with financial institutions. The child has to apply for a spending card, which they can do from the age of 11. All banking transactions can be done using a mobile phone app. They won’t have access to an overdraft, so can only spend the money that they have. A bank account will give them financial independence and responsibility.
Giving teenagers financial responsibility before they are 18 is important. It gives them experience in looking after their own money and dealing with banks whilst they are younger. They can do this without fear of getting into debt, or damaging their credit rating. They will be able to pick up good spending habits and learn about interest and savings.
Teach teenagers about interest
Teaching teenagers about interest is extremely important. If they have a savings or current account, they may be able to accumulate interest on the money that they are keeping in the bank. It is also worth teaching them that a loan or credit card works the other way around, as they can apply for one at the age of 18. The more money that they have in their bank or savings account, the more interest they will be able to accumulate. Doing an online course about compound interest rates is a good way of educating them.
Having financial responsibly should be taught to children and teenagers before they are 18. By helping them have independence early and educating them about money, they will be less likely to have financial issues in the future.
