Teaching your Teen how to Be Money Smart with their Pocket Money

Is your 15-18-year-old on a fast track to spending without a second thought?  Do you find that, regardless of how much you give them, they spend it quickly and consistently ask for more? Are they eager to buy new clothes, shoes or request a mobile phone that exceeds your budget? 

Perhaps it's time to teach them how to spend wisely, but also how to save. This way, they'll be better prepared for adulthood, and you'll ease the financial pressure they place on you. 

Don't worry; you don't need to have a degree in economics to guide them. You can start with something simple, like their pocket money. Take a look at our tips on turning your teenager's pocket money into a tool that teaches them money management and savings.

Drafting a monthly budget

What is the essential requirement for financial well-being? A budget, of course, meaning income minus expenses. Announce to your teenager that they’ll be receiving a fixed amount as pocket money on the 1st of each month, which will constitute their income. 

Ensure that the monthly pocket money covers their daily needs and habits, while leaving room for some savings. Your child will feel satisfied, as at the start of the month, they will have a significant amount at their disposal. 

Help them plan their expenses so they avoid running out of pocket money. If you give them pocket money online, ask them to keep an eye on their card balance. As you also receive updates on their expenses, warn them in advance if “bankruptcy” is looming.

Keeping a record of expenses

Proper money management begins with tracking expenses. Explain to your child that, now that they have grown up and are independent, they need to record how they spend their pocket money. Help them create a list of monthly expenses or, even better, if you give them pocket money online, check their monthly card transactions together.

Talk to them about the difference between needs and wants: Needs are survival essentials, while wants are the extras. Ask them to assess which of their last month's expenses were needs and which were wants, and encourage them to think about how to adjust their expenses so that they don't run out of money.

Providing incentives for saving

If your child dreams of a gaming console or summer holidays with their friends, you have the perfect opportunity to show them how to save from their pocket money to make it come true. This way, they will learn to set financial goals. 

Determine how much pocket money they will have to save each month and calculate the time needed to reach their desired target. If there are other “contributors”, such as grandparents, suggest that the child creates an emergency fund with the money they receive. A teen-friendly banking app will help them track their savings. 

myAlpha Vibe: Bridging generations

Now that you know the benefits, discover the modern and secure way to give your teen pocket money online with myAlpha Vibe. As long as your child is aged 15-18.

Through myAlpha Mobile, you can issue a digital prepaid card for your teen, easily loadable from your mobile. The child uses the card through the dedicated myAlpha Vibe app, to shop in Greece and abroad, even after they turn 18.