Whatever…Money Management Teenager Style

Teenagers can be a worry – just ask any parent. But when it comes to understanding all things financial, today’s teenagers have to deal with a much more complex and in many ways less tangible world.

Unusual indeed is the teenager today without a mobile phone – and the financial risks that come along with big data bills – while the world of online banking, debit and credit cards is just a login away.

That is before you get into the world of eftpos and the rapid convenience of paywave technology that makes it so, so easy to grab the extra bits and pieces you feel you need right then and there.

The paywave convenience may not just be a trap for teenagers but older folks generally should, with experience, have more awareness of what they can afford and know when they are perhaps living beyond their means.

Budgeting is a much underrated financial skill but teenagers in today’s modern electronic world can be excused for not always connecting the dots.

At the risk of this becoming a grumpy old man column, back in my teenage years budgeting was not optional.

If you did not get to the bank before 3pm on Friday afternoon you couldn’t drink beer on Saturday night. You also learnt that if you spent big on Friday night then you would not be drinking beer on Saturday night.

Such were the realities in a much simpler world.

The concept and impact of budgeting was a lot easier to understand when you just had to check how much cash was in your wallet to know how your budget was tracking.

Which is where the power of the old-fashioned paper bank statement can be put to good use – if you can get the teenager to open something as old-school as a letter.

But a new bank account – with new debit/credit card – plus motivation for a savings strategy did prompt the unsealing of a bank envelope in the Bowerman household recently.

Full credit to the bank involved because the statement layout showed in big letters not just the closing balance but also the amount of money that had gone into the account and the amount that had gone out.

The total amount that had gone out hit home and sparked a robust dinner table discussion.

Suddenly lunches with friends, coffees after school and so on were seen in a much more meaningful fiscal light.

Habits – allegedly – are about to change.

But the online world where teenagers are the first true native inhabitants can also be part of the solution as well as fuelling the problem.

Certainly you can get statements via email, online alerts about credit card payments can be sent, balances can be checked on the run as easily as a paywave.

But there are also an array of phone apps that help track expenditure and more importantly perhaps prompt good savings habits.

Most of these are commercial in one form or other but a recent visit to the ASIC MoneySmart website prompted the download of their recent Track My Spend app. While it may not win awards in the uber cool app design world, it gets plaudits for its functionality and is a simple, easy to use tool that lets teenagers and those a little further advanced in years to track spending over short periods like a week or further out on a fortnightly, monthly, annual or custom date range.

Best of all it is using the teenager tool of choice – the smartphone.

The corporate regulator’s MoneySmart website is a resource that has been built up over many years and it comes with the credibility of being delivered out of the offices of the nation’s corporate regulator as part of its effort to boost financial literacy.

There is a companion Track my Goals app to go along with the spend tracking tool that is also available free to download.

The MoneySmart site is a great resource not just for the apps mentioned but also for more detailed educational material and also investor alerts and warnings. All of which can help set up young investors – or those just young at heart – for investing success over the longer term.

Robin Bowerman is Head of Market Strategy and Communication, Vanguard Australia. As a renowned market commentator and editor Robin has spent more than two decades writing about all things investment.