5 Things Teens Should Be Taught About Money

Steph112

I am in my first year at university and have recently found this site. It's given me such good advice, and, although I've paid for a lot of things through savings (e.g. I paid for every one (bar one) of my driving lessons (around 30), theory test and exam, plus pass plus) and enjoy saving money, I've over budgeted at uni because I 'have' the money and spent the 'extra' on stuff I don't really need. What I'm finally realising now is that I am already hugely in debt and that if I don't need to spend my money then I shouldn't - I should put it into a savings account (admittedly now's not the best time for savings accounts, but what can you do with the economic climate as it is?) and start saving to pay a lump sum of my loan back when I'm finished and also budget in everything I spend. I know people say you should live for today but I like planning for the future (despite having little control over it) and I think that, if you have fun doing something like saving, then you're on to a winner!
Sorry for such a long rant!
And THANK YOU for such great tips!

Coupon-mad

My eldest DS is about to turn 16 and will be staying on in sixth form to take his A levels from September.

We are on a low income so I am sure we'll 'qualify him' for EMA. I have checked on that website so we know about how he should go about applying for that.

But he doesn't have a Bank Account yet (we have no savings and no relatives who could save for our kids either, so a new bank Account will be a blank canvas for him).

I used to work in a Bank years ago but accounts are more complicated these days. Has anyone got tips or experience of the best Bank Accounts for teens at the moment? I expect he would like to be able to get at his money from a cashpoint but I guess that option may not be available immediately? If so then no matter, he'll have to go to the branch to get cash out.

I know interest rates are low at the moment but what incentives for a teen to open a Bank Account does anyone know about (or can anyone link a useful thread here for me to read please?). I have searched and only found loads of out of date info (pre credit-crunch).

Thanks in advance x

Lokolo

For a normal current account the 2 I would look at are:

http://www.hsbc.co.uk/1/2/personal/current-accounts/under-18s
HSBC Account, Debit card, etc. I have found HSBC branches and internet banking the best.

http://www.lloydstsb.com/current_accounts/under_19s_account.asp
Lloyds. Good interest rate, Debit card etc.etc.

Only thing with the Lloyds is, even its a great interest rate its easy to spend (same with HSBC). I would open up a savings account alongside because it takes more effort and time to withdraw money from it.

Also at the moment its usually best to go for an account where he has easiest access to branch in case of problems and if he gets a job where he gets paid cash etc.

----

You rarely get incentives for 16 year olds. Its mainly for students going to university.

Coupon-mad

Thanks very much Lokolo, just seen your reply and I will look into those accounts next week. :T

Shame they are not offering any incentives to young students, you would have thought they would because that's when many kids open their first accounts and then might stay with the bank longterm.

Alyson_Walker

My 19 year old son is unemployed and wants to leave home. Does anyone have any advice on books, games or apps that would give him a basic understanding of personal finance? Particularly about the initial and ongoing costs of renting. He won't listen to me.

Bloomberg

MSE_Martin wrote: »

What's new?

I've revisited this thread as it's a gooden and turned it into a Great Hunt. Click reply to add your ideas.

Back to my original post...


I was woken this morning by Sky News. They were planning to do a piece of personal finance education in schools.

Scratching my head in dreary sleep talk, they asked me what five rules would you tell a kid about money. Hastily I came up with the following five, admittedly none are things I've not said before and don't come up in the Money Diet, but it was an interesting exercise.

After you've read my five, I'd be fascinated to read any rules you think kids can be taught. If there's some good ones, I may turn it into an article from the site 'wisdom from an older generation'....

So let me start it off:


A company's job is to try and make profit from us

The sooner people understand society is adversarial, and companies care about profits the better. That way a skeptical eye can always check, why are they doing this?, how do they gain? a good way to prevent problems?

Interest Compounds

Compound interest is very powerful. When you're saving, as you earn interest on the interest your savings grow more quickly over time. When you're borrowing, as you're charged interest on interest your debts increase rapidly. Be aware of the impact of compounds.

Always check three

I'm not a big fan of the 'shop around' mantra. Generally I believe 'think through the logic' is a better start position. However, whatever you do or buy, checking three sources to ensure you're getting a good deal is a golden rule.

Pay off debts with savings

Understanding that debt and savings are just opposite sides of the same coin is a must. If you've £1,000 of savings earning 3% after tax, that's £30 a year gained. If you've £1,000 of debt at 18% that's a cost of £180. If you paid off the debt with the savings you'd be £150 better off.

Of course, the more sophisticated understand that if the debt is cheaper than the saving you can profit, yet in most lives this is rarely the case, so pay off expensive debts with underperforming savings and you're doing well.

Bank accounts lie

Your bank account is just a snapshot of your current finances. It doesn't look at what money is due to come in and go out. It doesn't look at your spending over a year. All ii does is give you a picture of an instant in your account. You couldn't take one still frame of action from Eastenders and know the entire programme script, a bank account is just that; a 'freeze frame picture' - don't trust it. (see Budget the MoneySavingExpert.com way)


That's my starter, now over to you....

See the full Financial Education Campaign section for lots more info.

When a person gets their attitude to finance sorted out other parts of their life will soon follow.


DEBT; An ingenious substitution for the slave master's whip and chain.



When you get paid the first person you must pay is yourself .


No saving means, fewer holidays, a smaller house and penny pinching in retirement.


The above really struck a cord with my youngsters. :T

matttye

- Credit agreements and what happens when you violate them.

I had no idea what a default was when I got into debt and had no idea it would leave a black mark on my credit file for six years or the implications of that.

Fishingtime

Alyson_Walker wrote: »

My 19 year old son is unemployed and wants to leave home. Does anyone have any advice on books, games or apps that would give him a basic understanding of personal finance? Particularly about the initial and ongoing costs of renting. He won't listen to me.

Use a pen and some paper

Incoming £100

Outgoings
Rent £80
Food £20
Bills £20

Equals £20 overspend

andyfromotley

1.No matter how friendly, or trendy, or cool, or welcoming they appear, every single company exists for the sole purpose of making money off you.

2. Every single pound paid in interest is your past stealing from your future.

3. Giving to charity gives rewards far beyond the cost.

colsten

andyfromotley wrote: »

1.No matter how friendly, or trendy, or cool, or welcoming they appear, every single company exists for the sole purpose of making money off you.

1A. Companies also exist to provide you and millions of other people with jobs so you can earn a living
1B. You are allowed to set up your own company if you so desire.

andyfromotley wrote: »

2. Every single pound paid in interest is your past stealing from your future.

2A. Every single pound you make in interest helps to stave off the effects of inflation
2B. There is good and there's bad debt. Play the quiz.

andyfromotley wrote: »

3. Giving to charity gives rewards far beyond the cost.

3A. Charity begins at home.