DOES YOUR TEEN UNDERSTAND MONEY? HOW TO MAKE SURE THEY HAVE THE BASICS COVERED

Do you remember the first time you went to a shop and bought something you chose yourself – using your own money? It felt pretty amazing, didn’t it?

Being able to make your own decisions about money is one of the most exciting parts of growing up but unfortunately, the UK has a big financial education problem. Not understanding money properly can cause a lot of trouble later in life.

If you’re the parent of a young teenager, you’re probably thinking of how to approach giving your youngster more financial independence and setting them up with the right knowledge.

While starting to manage your own money can be lots of fun, it also requires a whole new set of skills. After all, before you get money, you need to ‘get’ money.

That’s the message of ‘get money’, a new campaign from HSBC UK, that’s about ensuring everyone is taught the essential money skills we all need for everyday life.

Personal finance is rarely covered in detail at school, which is unfortunate given most of us deal with money every day of our lives. As a result, many Brits are going into adulthood without the crucial money skills they need.

But this doesn’t have to be the case: by building your financial understanding when you’re still at school, you can set yourself up for success later in life – and perhaps even boost your future bank balance.

Whether you’re a parent hoping to improve your child’s financial know-how, or a young adult looking to learn about money, HSBC UK is here to help.

In this guide, HSBC UK reveals its top money-management advice for teenagers – and some of the amazing learning opportunities on offer.

How teens can stay smart with money

Take your first steps towards gaining control of your money by having the basics covered.

There’s a lot to get to grips with as you progress along the road to financial independence.

By building up your understanding of money, you can develop good habits early on – and ace any challenges that come your way!

Below, the HSBC UK team offers their tips across four key areas.

Managing money

A bank account, the nerve centre of a person’s financial world, can be opened by young people from the age of 11 with the support of an adult, or by themselves from the age of 16.

They usually come with a banking app, so it’s important to take the time to learn about the app’s features, from overviews of your balance, incomings, and recent spending, to areas where you can set up and manage regular payments.

Lots of people also choose to use a digital wallet, which stores all your card details in one place for super quick payments.

To ensure you aren’t spending too much, it’s a good idea to make a budget.

The easiest way to do this is to go through your bank statements for the past three months and tot up your outgoings. Then you can set some realistic targets (leaving some room for the occasional treat!).

In the old days, this involved a pen and a calculator, but there are now plenty of online budget builders that make the process much simpler.

Clever spending

When you go shopping or if you are bored and browsing online, it can be tempting to splurge on impulse purchases, not least when special offers or glitzy ads make it seem like you’re getting a bargain.

We all have certain ‘triggers’ for overspending – like social media ads, peer pressure or simple boredom – so it’s useful to think about which ones apply to you.

Then, before you make a purchase, ask yourself some quick questions, like whether you really need what you’re about to buy, whether you can afford it, if you need it now, and if there’s a way of getting it cheaper elsewhere.

This isn’t about stopping all non-essential spending, as your younger years are there to be enjoyed, but taking a smarter approach overall. It can be useful to delay any spending decisions for 24 hours to test if you truly need something.

Understanding contracts

There are plenty of subscription services out there, from video streaming and online gaming to clothes and food boxes. Most mobile phone contracts also include monthly payments.

Before you sign any contract it’s really important to ensure you understand what you’re actually agreeing to.

To do this, read through the contract overview and small print for key details like how much you’re paying, how often and whether there’s any penalty to cancel before a certain date.

It’s also worth ranking your subscriptions in order of priority so that if you do need to cut back you know where to start. And if you do sign up for a free period make sure you make a note of when to cancel if you don’t want to start paying the full amount.

The world of work

Phrases like ‘the daily grind’ can make working life seem dull, but being employed offers lots of benefits, from the security of a regular salary to the satisfaction of progressing in your chosen career.

25 per cent of teens earn money through a part-time job,* so it’s never too early to start learning about the process of making money and the ways various people go about it.

One useful approach is to look online at the sort of jobs available at your favourite companies or brands to see which qualifications they want and the money you could earn.

It can also be interesting to consider how different roles earn an income. For example, influencers are rarely directly employed full-time by a company and instead earn money through creating sponsored content or collaborating with a brand.

Some work can also be sold as a ‘project’ for example, a freelance writer or designer is paid for their work, rather than a monthly salary.

To see how savvy you are with your cash, visit HSBC.co.uk/Get-Money

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*Exploring the increase in people who’ve never had a paid job’ – Resolution Foundation, Jan 2020.

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2024-12-12T16:45:11Z