5 Things Teens Should Be Taught About Money

rubix_76

isasmurf wrote:

The differences between the different interest rates quote (AER, APR, etc...) and how to calculate them.

I can honestly say, I don't know the difference between AER and APR, can somone enlighten me.

I know that APRs SHOULD mean the same charge for the same APR, but there are many different ways of calculating it, I once got a letter from Barclaycard (that I requested) explaining how they calculated their APR, and it made no sense, and I consider myself good with Maths.

Can anyone help on this :T

rubix_76

EagerLearner wrote:

Also, the fact my grandad planted a money tree with me, and I checked it for weeks on end so see if money had started growing... BIG lesson learnt right there!

This one's a cracker, can you send me some seeds from that tree, you must have been using the wrong fertiliser or something, I'll give it a try:rotfl: :rotfl:

Ill remember this one for my nephew, he was seconds away from bidding for a brand-new Ferrari on E-Bay as his parents left it logged on, and he has NO MONEY sense at all, He is only 7 but he didn't know the difference between pounds and THOUSANDS of pounds, I think his parents learnt a lesson on internet security that day !!!

GeorgieW

Parents often don't help themselves, "helping" their children because if they don't their offspring "wouldn't have any money", not realising that they will never have any money if they keep "helping".

I think it's a good lesson learnt as teenagers, they are still at school/home so you can keep you eye on them. Make them get a job, (and use the money earned to save long & short term for what nice things they want now & later) it doesn't have to be hours every night or anything just something.

A job teaches so many lessons essential for later, for example: respect, pride, budgeting, tax, deferred gratification, patience and the vaule of money. As someone said in an earlier post, when they realise how long they have to work to earn enough to buy what they "need" often it will change into a luxury want that is no longer necessary and the one that's half the price will do after all!!! Plus if they do decide they actually need that really expensive item, they will enjoy it and look after it that much better as well. It will really mean something to them.

Trust me, they will thank you later. :T

The only other thing is credit cards. Please don't get a credit card (like most people seem to do) if you are bad with money "to see you through" or something. It will only make things worse. :eek: Credit cards, in my opinion, are for people with money/good with money, who can and will pay them off in full evey month.

Controlling your own money is one of lifes most important lessons. The thing to remember is that there's no big mystery, it's only numbers and there are only 10 of them! You just need to get your brain into gear early so that you don't get in trouble and spend your whole life worrying. This site is brilliant & will keep you on your toes! :money:

P.S. I'm not a parent, just someone who learnt the value of money early on supporting myself through school and university.

EagerLearner

rubix_76 wrote:

This one's a cracker, can you send me some seeds from that tree, you must have been using the wrong fertiliser or something, I'll give it a try:rotfl: :rotfl:

Ill remember this one for my nephew, he was seconds away from bidding for a brand-new Ferrari on E-Bay as his parents left it logged on, and he has NO MONEY sense at all, He is only 7 but he didn't know the difference between pounds and THOUSANDS of pounds, I think his parents learnt a lesson on internet security that day !!!

he he - yes, I can still see me now, checking it eagerly for any signs of shoots popping up!

I think your nephew is not going to be as gullible he he...

Most important thing for me when I was young was WANTING to have my own money and spend it how I wanted. Nothing is mor inspirational. My mum gave us the equivalent of a few pounds a week, so that spurred me on to being careful with that money PLUS earning myself some more.

Pocket money, if handed out with the correct messages, helps gain an understanding of the value of money. I will be handing it out one day no doubt...

Kilty_2

schoolfundraiser wrote:

I recently set up a NatWest current account for my daughter (14) so that she has a debit card she can use for her clothes.:

More and more banks are providing debit cards to under 18s now

Halifax/Bank of Scotland give Visa Electron to anyone aged over 11.

Clydesdale Bank give Maestro to anyone aged 13 or over (I think, was 13 when they gave me my single function ATM card which they now will not supply, Maestro instead for all customers)

Lloyds TSB give Visa Debit from 16.

Banks are getting better at supporting young people, as they obviously see them as the future source of income

CopperPlate_2

Don't spend what you haven't got - either now, on in the future in the shape of credit cards.

Spend wisely and think before you buy. Go away and think before you buy any 'treat' - you can always come back tomorrow and that time away can get you over the impulse to buy.

Jecca_2

I teach a money matters module to 15-16 year olds in a comprehensive. One thing I always teach them is that they should try to buy their own home (even if sharing mortgage with others) rather than renting- otherwise all they are doing is paying someone elses mortgage! We work out what mortgage they and friends might get and then find it is often the deposit that is the killer! We then work out how much they have to save each year (birthdays, Christmas, jobs etc) in order to have around £20,000 saved by the time they are 24 and hopefully in a position to buy a share in a house! Compound interest always popular in this activity

Paul_Herring

Jecca wrote:

One thing I always teach them is that they should try to buy their own home (even if sharing mortgage with others) rather than renting- otherwise all they are doing is paying someone elses mortgage!

What sort of figures are you using for (a) rent payments per month and (b) mortgage payments per month?

Do you take into account the potential volatility in mortgage payments, depending on the type of mortgage taken out.

Do you take into account mortgage arrangement/early payment fees?

gb57

I am very impressed with the teenagers who are contributing to this thread - so sensible!

Lots of good advice here - my main thing would be that starting when they are teenagers is WAY too late. Money sense should be instilled from the word go, as it was in my family. All those people who have started with their children when young (see the posts), make a lot of sense. Also start teaching them to cook when they are little - it is such fun to make pastry or cakes or whatever, and that interest can grow. Being able to cook is not only a great money-saver, it is better for your health, prepared meals and junk food are revolting and bad for you.

Surely it is up to parents, not schools, to teach their children basic money lessons? Schools should be for "proper" education, though I agree that teenagers should then have lessons on things like mortgages, interest rates, etc etc

Don't keep bailing them out financially if they do get into debt when older - they will never learn. If your working kid is still living at home - charge rent.

Surely Uni can be enjoyed without running up a fortune on booze??

You can budget, live within your means and still have a lot of fun and enjoy life - why should having fun always mean having to spend loads of money???

PS Who remembers when buying on credit (not cards in those days, but usually someone coming to the door each week to collect a small amount) was called "the never-never", for obvious reasons - you "never-never" finished paying...:rotfl:

Paul_Herring

gb57 wrote:

Surely it is up to parents, not schools, to teach their children basic money lessons? Schools should be for "proper" education, though I agree that teenagers should then have lessons on things like mortgages, interest rates, etc etc

I get the vague impression that most adults in the UK (people on this site, naturally excluded) don't have the foggiest idea of basic money issues to begin with - they don't know anything to teach their children:

• Children's bonds? Stick them in interst earning cash accounts/let the government decide where it goes.

• Pensions? Don't need one - the government will look after me/I'll use my house.

• Credit card debts? Doesn't matter - it's below my CC limit.

• [strike]Unauthorised borrowing fees/bounced request fees?[/strike] No - forget that one - it generates more heat than light on here.

• Posess debts and savings? At least I'm getting interest on my savings!