Budgets and teens: controlling impulses

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As responsible parents, we are not only ‘mum and dad’, we are educators. We may directly – or indirectly – set an example to our young people that informs their approach on a variety of things: how to cooperate with others; how to handle difficult situations; or how to weigh up choices they have to make in life.

Personal, Social and Health Education

Life skills discussions at school are delivered on a variety of topics, many of which are also on the school curriculum. These include philosophical/ethical discussions or practical advice on issues such as staying safe online. These lessons spark follow-on conversations at home and form a useful part of every teenager’s personal development.

What about money management?

However, none (so far) has dealt with the matter of personal finance. As parents, how do we set an example to our teens on how they can manage their finances? Where do we begin in showing our young people how to manage their hard-earned money?

How to manage money becomes more pressing when our teens start making a little pocket money of their own, either through a part-time job or perhaps by earning a bit of commission on tasks they might do to help at home (Dave Ramsey’s preferred approach).

Lots of parents I know also provide a monthly allowance, so that their teenagers can make decisions on how to spend their own cash. This begins to instil some self-discipline; our own daughter commented that having a pot of money for which she was responsible helped control her ‘impulses’.

Under 19’s account

We found that opening a bank account was a great first step towards our teen developing financial literacy. There are some great accounts around, such as TSB’s under 19’s account. Opening a ‘proper’ bank account (as opposed to a savings account over which a ‘controlling adult’ still has full oversight) was a key milestone. A meeting with the bank manager was necessary and the formality surrounding the account-opening event signalled a step-change in the financial life of our teen.

Do apps help?

As well as the online banking app provided, I suggested that an app like Spending would be useful. By using the app, our daughter could immediately record transactions she had done. She soon realised that a transaction could take a few days to show on her actual account, so being able to keep a record that was bang up to date was incredibly useful. Now that she is more accustomed to checking her own bank’s app, she has let go of the need to do this cross-check but it can be useful at first.

Controlling those impulses

Amy from More Time than Money wrote a really good post on impulse buying, which links really well with these thoughts. As adults who care about sticking to a budget, we already know it’s important to be super-intentional with our spending.

It’s no different for teens: they soon begin to appreciate the value of things when they have to pay for it themselves. The cost of eating out, for example, (something our girl’s group enjoys), can be expensive. Choosing to go out to eat might mean passing up another opportunity or deciding not to purchase something new for a party.

So, when I think about teens and spending, there are a number of things I’d say:

  • Keep some for a rainy day
  • Be intentional with your cash
  • Know that buying X may preclude you from buying Y
  • Just because everyone else is buying one doesn’t mean you have to
  • Do you really need it?
  • How useful will it be?
  • Would you buy it at full price, if it wasn’t on offer now?
  • Would a lower-priced item do just as well?
  • Can you get it at a lower price second hand?
  • Can you borrow one?
  • Do you already have one that would do just as well?

Hmm. Maybe this is good advice for all of us – for kids of all ages – as we enter the ‘season of acquisition’.

What advice would you give your teenage self on money matters? Do let me know by replying to this post, below.


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It’s not what you spend, but what you buy that matters

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I’m reading a book* about our relationship with money. As I read, I realise that a lot of what we learn about money management suggests that tracking our spending will help us ‘tell our money where to go.’

We all know that if we look after the pennies, the pounds will look after themselves. Right?

Was what you bought really worth it?

Whilst establishing (and sticking to) a budget works for a great many people, the authors offer a fresh perspective. They argue that, if you first work out your proper hourly rate of pay, you’ll then be able to consider how many hours of work (translated into life energy’) you expended in order to buy something. Then you can ask if what you bought was really worth it.

When you look at your spending in this way, it takes on a whole new perspective. It might even impact on the choices you make about how you spend your hard-earned cash.

For example, if you earn £10 per hour, that £5 glossy magazine has effectively cost you half an hour of ‘life energy’. When you know this, you can then ask:

“Did I receive fulfilment, satisfaction and value in proportion to life energy spent?”

If not, then you might think twice about purchasing a similar item again next time you’re presented with the opportunity.

Why we spend

In the book, we read that US organisation Debtors Anonymous asserts that we go into debt to avoid feelings, especially feelings of deprivation. Like other addictions, debt allows us to deny pain, sorrow, loss, anger, loneliness and despair. I would say that you are more likely to be struggling with debt – or on a very tight budget – if your spending doesn’t align with your values or bring you real satisfaction.

So, I’m curious.

I’m going to conduct an experiment: a ‘Life Energy (Expenditure) Experiment.’ I’ll do this for the whole of next month.

My ‘life energy experiment’

Rather than tracking my spending or recording ££’s spent, I’m going to track what I buy and ask what value, fulfilment or satisfaction I derived from these purchases. I don’t have any particular plans to buy anything in November (no Christmas shopping for me – see my earlier post on gifting here).  So, I’ll be curious to see how the month unfolds. I’ll be posting my purchases on Twitter, along with their related ‘fulfilment factor’.

Will you join me? What will we notice? How might our future buying habits change by conducting this real-life experiment?

Follow the story using #LifeEnergyExperiment

And let me know how you get on!

*”Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century” by Vicki Robin, Joe Dominguez, Monique Tilford.


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