Does your 10-18-year-old child have a poor relationship with money? Do you notice that no matter how much you give them, they spend it quickly and constantly ask for more? Are they eager to buy new games, travel and sports 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 be an economist to educate them. You can start with something simple, like their pocket money. Have a look at our tips on turning your child's pocket money into a tool that teaches them money management and savings.
Setting a monthly budget
What is the essential requirement for healthy finances? A budget, of course, meaning income minus expenses. Announce to your child that they will 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 that their pocket money doesn’t run out. If you give them pocket money online, ask them to regularly monitor their card balance. As you also receive updates on their expenses, warn them in advance if there's a chance of “bankruptcy”.
Keeping a record of expenses
Tracking expenses is essential for proper money management. 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 essential for survival, 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 to save
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 how long it will take to accumulate the desired amount. If there are other “contributors”, such as grandparents, suggest that the child creates an emergency fund with the money they receive. A 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 10-18.
Through your mobile app, you can issue a physical or a digital prepaid card for your child, easily loadable from your mobile. They can use it in Greece and abroad, even after they turn 18.
Find out how to activate and manage myAlpha Vibe and get answers to your questions about this unique programme from Alpha Bank.
