Were you financially prepared as a teenager? Did you have a plan to save for your future, cutting down on your spending and concentrating on your savings? Me? I certainly wasn’t. I never spent more than I had, but saving wasn’t in my mind when I saw something I ‘just had’ to get, I got it!
However, it seems that I wasn’t the only one doing this and still today it is true, as a news report by the BBC states that Teenagers are ‘ill prepared’ over finances. It states that ‘A third of this age group had never put money in a bank account and two-thirds could not read a payslip, research for the Money Advice Service suggested’.
The Money Advice Service commissioned a survey of nearly 5,000 youngsters aged 4 to 17, with further questions directed to their parents. Results found that almost a third of 16 & 17 year olds were unaware what would happen if council tax unpaid and only 7% of 7 to 17 year olds had spoken to their teachers about money.
Three in five parents said they felt confident talking about money to their children however, according to the Money Advice Service, their own money management may not be setting the best examples. Half of the parents asked said they did not save regularly, whilst 44% said they didn’t feel confident in managing their money. The service is calling for more consistent financial education from primary school age and greater support for the parents to talk to their children about money.
What young people should know:
o Understand a payslip and check whether a tax code is correct, rather than an emergency tax code for a first job
o Be aware of which bills to pay first, primarily council tax
o Know that failing to pay could affect a credit rating for six years, with consequences such as difficulty getting a new mobile phone contract
What parents should do:
o Help children to be aware of bills that need to be managed, how to pay, and when
o Show youngsters your payslip to help understand tax and national insurance, and tax codes
o Talk to children about budgeting and savings decisions and how this pays for holidays
What kind of state were your finances in as a teenager? Do you feel you were told enough about money saving? Let us know by commenting below!