Teenagers Pocket Money

twopenny

Can only say what happened to me as I had a grandparent on a pension.
I had the essentials given like transport and meals with just a little left over. When I asked for more I was told to write down what I'd spent for a week.
This was really annoying but had to do it if I wanted the extra. Best thing I was ever taught and has come in useful in adult years. Once I'd done that I got the extra and i was wise with it having had my eyes opened.

I got premium bonds for passing Gce,s. That taught me that gambling was not the way to sucess but protected the money.
I had a small PO account which I didn't have access to but could see it grow.

This grandmother used to invest in all sorts and like you and your cashback cards,filtered into my brain.
I not only learned about getting and spending money but that I could increase what I had which came in useful quite early on.

May be worth looking into what is suitable, let your partner know and then leave it. Let it filter in without your intervention.

TheBanker

Grumpy_chap said:

TheBanker said:

His mum has said she will give him £30 to get him started, and then £10 per week. From this he needs to pay for any social activities e.g. cinema trips or going to town with his friends, as well as any food or drinks he wants while he's out. He'll need to save himself for any bigger 'wants' (although he will still get Christmas and Birthday gifts). Mum will still pay for basic clothes, phone, football sessions, school lunch, school bus pass, school trips and anything else related to school e.g. stationery and revision guides. If he wants 'designer' (i.e. non basic) clothes or trainers then he has to save up for these. 

I have said I will also give him £30 to get him started but I will suggest he puts 'my' £30 into the savings account and keeps it back for unplanned expenses and tries to add to it so he's got some money for bigger purchases e.g computer games or trainers. 

This is an important step as it is never to young to learn about budgeting.

I am just unclear as to whether the £10 per week is sufficient to meet all his "wants" (without being extravagant) is that is to cover social activities plus trainers and such like.

You mentioned that this week he went to the cinema.  I just checked online and the price for a single seat at the cinema is as follows:
 - Cineworld £9.99
 - Odeon £14.49
 - Vue £7.99 (£5.99 restricted view)
He will certainly learn the need to budget with £10 weekly versus those market rates.  He may need to investigate student discount cards / membership schemes etc.  He will need to understand that a drink from the supermarket taken into the cinema is better value than purchased in the foyer, subject to being able to smuggle the drink in.

If he is to hold some of the weekly £10 back for trainers etc., the budgeting becomes more challenging, possibly to the extent of impossible.

There is a lot to be said that he learns to budget and does not take the cinema for granted, so it is maybe once a month, but does he have enough charisma to carry his friends with him for lower cost activities?

He will need some good advice to budget appropriately with the £10 weekly, so that this does not all backfire and achieve the exact opposite of the desired outcome.

All of this is true, but part of learning to budget is to get the best deals. There are ways to get cinima tickets much cheaper than you suggest. Currently at our local cinema he can get childrens' tickets (until age 15), but I'm also able to get half price tickets through a rewards app. With a bit of forward planning he could not only reduce his own costs, but save his friends money too.

I don't think you need to smuggle drink in, our local cinema don't seem too bothered these days. 

It will be impossible for him to buy trainers etc and have any kind of social activity which is partly why he's been given an extra £60 to get his savings started. I don't think he'll have to buy his own trainers, but he might want to contribute to a more expensive pair than his mum would buy.

I'm sure his mum will review the £10 at some point. Hopefully he'll show her that he can be responsible and she might increase it a bit. 

kimwp

Just thought - It might be worth a discussion if it hasn't been covered- whether the £10 is to cover birthday events and presents or just for general socialising. 

Savvy_Sue

Kim_13 said:

Savvy_Sue said:

Kim_13 said:

Emily_Joy said:

They probably don't want to generate much interest, as anything over £100 per year would impact mum's PSA/be taxed at her usual rate.

Really? I thought children had their own PSA / tax-free income allowance. 

https://www.moneysavingexpert.com/savings/child-savings-tax-free/ (Point 5)

They do, when the money isn’t from parents (they also mention step parent, so they may find HMRC, rightly or wrongly, trying to include mum’s partner in the same group if it came to that.) It’s obviously been set up that way to try to prevent adults from using a child to avoid tax on their own savings interest. 

Ah yes, that makes sense now. 

TheBanker said:

I doubt thiss will be a problem as he won't make much interest (if he did then we would probably move the money to a JISA). But I am curious about HMRC would treat money I give him. I don't think of myself as his step-parent, he doesn't ever refer to me as his step-dad, I am not married to his mum, we don't live in the same house, and he is not financially dependent on me. So in the extremely unlikely even that he manages to generate £100 interest from money I give him, I think we'll be ok.  

I agree, no way could HMRC consider you as a step-parent, because you are no such thing. I suspect that even if you lived together, it still wouldn't count, because by the same measure (of not being married or in CP) you couldn't take advantage of passing part of your tax allowance to the other half of the partnership, if one of you didn't pay much tax. 

Savvy_Sue

By the way, I was drinking coffee at DH's gym this afternoon while he used the sauna, and two youngsters, I'd say definitely at the lower end of secondary school, were buying their own refreshments. On bank cards. So easy! 

theoretica

This reminds me of a rather MSE story of teen budgeting.  Parents thought they had given the teen a fair budget for clothes and a little extra.  Reckoned without the teen being a bit smaller than their friends and able to buy all sorts of outgrown stuff for about 50p...  Parents settled on explaining to all and sundry, I suspect to deflect any thought that they were not providing decently for needs!

Honeylife

Pocket Money /Allowances are what you can 'spare' within your family's own finances.

My kids are grown now, but when they each started secondary school they got an allowance of £10 on Fridays (the third child of £15). ABSOLUTELY NO ADVANCES!  It was never linked to chores, as chores were mandatory and for the benefit of the house!  Pocket money was never withheld for bad behaviour.  It was only "docked" if they broke something and the item had to be replaced. That was very rare.

#3 Child got £15 pw because he had to buy a bus pass (no free travel for kids in those days) and the rest was his to spend. The other 3 kids lived a block from their school.  If #3 wanted to save a bit he didn't buy the bus pass and walked to school for a week. He mostly bought games.  #4 Child topped up school lunches and saved a few pounds occasionally.

When they got to the 6th Form they got £30 pw. (This figure was chosen as it was the EMA rate, at that time, not that they got EMA but kept them in line with a general 6th form allowance).  Again no Advances.  Cash for the first three, the youngest got it put straight into her account. They all had savings accounts which they controlled and we never asked to see them but knew when they were saving for something as they would say, "Just another week and I can get x, y or z"

They got birthday and Christmas money from grandparents (who always gave a pound each when they visited) and other relatives, plus extra cash when they passed a music exam e.g., £5 for a pass, £10 for merit and £15 for a distinction.

We still gave additional money for clothes, shoes, books, mobile phones and the necessary things. 

They were all wasteful for a year or two then settled into "saving for stuff", then simply "saving just to save". By the time they left secondary school, they all had a good grasp on budgeting and saving, the younger three could go travelling having saved a good bit of money. The biggest saver was the second child who never spent any money, she also walked everywhere, saving pennies and would even save her clothes allowance.  The third found eBay quite early and got us to sell toys he had outgrown and save that money. The others did a lot of babysitting and worked in sandwich bars. Youngest was the first to buy her property with zero help from us parents. She had been working and saving through Uni.  All are keen followers of MSE and share saving tips!

As parents, we felt it important our kids learn to save and budget. Then to work and save.  I had a relative who didn't give her kids any allowance and they were constantly stealing from her including her cash card. Another good friend had a similar issue and her son not only stole from her but sold her belongings! 

The saddest thing now is I have two grandchildren, but absolutely no cash in my house or purse so I cannot slip them any change when they come over to mine, as my grandparents and my children's grandparents did.  I never remember to get cash from the ATM! Not sure how to resolve this without asking for their bank accounts.

Emily_Joy

Honeylife said:

The saddest thing now is I have two grandchildren, but absolutely no cash in my house or purse so I cannot slip them any change when they come over to mine, as my grandparents and my children's grandparents did.  I never remember to get cash from the ATM! Not sure how to resolve this without asking for their bank accounts.

Before Covid all buses in our area were cash only & no change given. So I developed an habit of using a staffed check-out in Waitrose occasionally and asking for cashback in £1 coins. In those days I also had cashback offer on my Lloyds cards, so £1 x 10 coins would generate 50p cashback immediately.