How to advise/help teens with money.

[Tumbleweed101]

My 15yo was just telling me how her friends parents have put several £k in her savings account over the years, she gets pocket money etc.

I've been a single parent on a low income relying on tax credits throughout my children's childhoods. There is no spare money for savings. I can't help my children in any way financially. I have nothing to give, no investments, assets or inheritance of my own. We live month by month and have a council property.

How should I best advise my daughter at this stage. Any saving accounts to open when she gets a job? Any type of assets we should be looking at? Other than telling her to think carefully about her education choices I'm at a loss on how to help her look forward. She feels like she has no chance in life because I can't give her any help and haven't been able to save.

Set up a stocks and shares isa Moneybox is good. Compound interest small and little builds over the years.

Link a debit card and round up.

I got zero help from my DP’s and neither did my DH. Advice would have been invaluable at 16 for us. Stocks and shares at this age is the most lucrative long term investment.

LISA for a house deposit also helpful.

Small cash emergency fund.

Stick to a budget.

It is about consistency and habit.

I am still not very good at it just lucky in the year I was born meaning property was cheaper to buy and final salary pensions 🍀 The playing fields have changed.

Thanks, I'll take a look.

Yes, advice is the next powerful thing after actual financial help! I never had any help either and I feel I lack so much knowledge when I hear others talking matter of factly about money and savings etc.

I live within my means and have little debt, just 6mths on a car loan to go, so I'm not terrible at it I just lack money to get started with lol.

This link https://www.moneysavingexpert.com/family/financial-education/ is to MSE financial education pages which includes a link to a text book.

Learning about finances, savings, investments and pensions is a lifelong process. Think about it as building blocks.

I agree with reading the pages at above link and would also suggest MoneyHelper too.

Thank you for those links :)

There are a few ways to "help" without actually costing money. Actual advice is priceless, i.e. how to budget, the effect of interest (both in terms of compound interest on savings but also on the cost of interest on loans/credit card debt etc), help her understand student finance (assuming she's going to Uni), helping her understand the implications of signing up for credit, loans, leases, etc including student accommodation in terms of checking the contract, becoming liable for damages/lack of cleaning, "joint and several" liability with other students in the flat if there is any damage, need for insurance of personal belongings etc.

Also, help her to get a good credit score for a few years' time when she'll need it, i.e. she needs to open a current account in her own name with a major bank and use it wisely, she needs to register with the local authority for voting as soon as she's old enough, she could do with a provisional driving licence as soon as she's 17 whether she intends to drive yet or not (good for ID proof, and also helps reduce motor insurance the longer she's held any kind of licence). She should apply for a credit card as soon as she gets a job - Martin Lewis's website has a couple of links for "guaranteed" acceptance credit cards and cards where she can "pre-apply" where it won't go down as a black mark if she's refused one. When she next gets a mobile phone/contract, put it in her name, even if you pay it yourself, as it goes on her credit score as a positive. Having a good credit score means she'll have more options in years to come when she needs credit, or loans, or financial contracts/leases, etc. Credit providers look down on people who don't have credit cards, contracts, etc as the mere fact of having access to credit and having contracts means you are more trusted (assuming you've not defaulted!).

Encourage her to find paid employment at the earliest possible age. Not only will that give her money to spend/save, it gives a sense of responsibility and, again, looks good on credit scores, as well as looking good on Uni applications and future job applications. Even one shift a week at McDonalds is better than nothing!

Encourage her to save some of any money she gets, such as birthdays and Christmas, put it in some kind of savings account and encourage her to watch it build up, rather than her just spending it on trivial stuff that will end up in landfill.

You may not actually be able to give her money, but you should be able to pass on lots of knowledge, hints/tips and life experience which will put her in a good position to make good decisions when the time comes. Avoiding making financial mistakes by giving good advice is just as important/beneficial as giving them a shedload of money.

If she can get a job it will give her some financial independence. Both dc worked from 15, started just pot washing and we got them to save half of their wages. It got them into a good habit. It is difficult when you live month to month and remember you are doing your best and not everyone can save for dc. Ds17 also does a bit of buying and selling on vinted which he seems to do quite well at. This money is his do with as he likes.

Second all of this.

Also to not forget that everyone has different circumstances and she needs to make the best of what she has, she can't base her own financial and future plans on being given money that doesn't exist.

She needs to work or otherwise increase her income, eg a side hustle.

She needs to consider how her education and career choices will impact what money she has, eg if she does a degree apprenticeship instead of university in the conventional way she will start earning straight away and her employer will pay her fees so no student debt.

Also try not to go into a career that will require her to live and work in a high cost area as it will be years before she sees the benefit of this.

She always needs to spend less than she earns.

Definitely be mindful of how small spending choices can make a huge difference to how far her money goes. There's a wide range of things that people can spend enormous amounts of money on that add little value to their lives or can be done cheaper eg

Food and drink out of the house
Higher end mobile phone contract
Any sort of beauty treatment or grooming
Constant new clothes etc
Cars on finance when she's older

If she falls into the trap of spending all her money on those things she'll never have 'savings'.

My parents never gave me financial help either, but I got good advice on credit cards and debt from my father which I amso grateful for... I watched him cut up his credit card one day (we lost our house shortly afterwards) and he essentially told me they were the work of the devil and never to have one. As it happens I do have one (only to keep a good credit score) which I always pay off in full. But I learned that even a small amount of debt can snowball quickly, and if I want to buy something I save up for it.

And I second the advice from other posters, if she gets a job as soon as she can, then sets up a couple of accounts and puts a fixed amount info a little high interest savings account, she'll soon learn about compound interest.

She needs a bank account. Actually two accounts, a current and a savings account. Get them set up now before she starts working.

Ideally she needs pocket money / allowance and I know that is difficult.

I try to do the 1p challenge, you start with 1p moved in to a savings account, or a jam jar to be later put in the bank. Day two you put 2p etc.

You can actually do it in any order, if you look on the MSE website there is a sheet you can print out and tick off as you go.

At the moment you can get quite decent interest rates. And you can get accounts that pay interest monthly.

Another thing MSE advises is when you get a pay rise put that rise into a savings account.

I have accounts with Nationwide, I had no idea that they pay Fairer Share Payment until I was notified I was about to receive it. So for having a current account and £100 in savings they gave me £100.

Did she get a CTF when she was born, OP? She’s the right age. So if you don’t have details of it you can look it up: https://www.gov.uk/child-trust-funds/find-a-child-trust-fund

Best thing you can do is show her how you budget. Show her the whole incomings and outgoings. Knowledge is power.

I would say forget about a job at 15! That's wrong advice. Let her concentrate on her education so that she has prospects when she grows up.

Job at such a young age means a working class hand to mouth lifestyle all her life. Concentrating on an education or skill will help her longer term.

I think a good thing to learn to aim for when she starts earning is the basic 50/30/20 rule. 50% for essential outgoings (rent, food, bills etc), 30% for things you want that you could cut down on if needed (subscriptions, clothes, going out etc) and 20% for savings.

Obviously it’s not always possible but it’s a good goal and I’ve found it a really helpful gauge over the years- it acts as a good benchmark for how much I should be spending on different things.

Job at such a young age means a working class hand to mouth lifestyle all her life. Concentrating on an education or skill will help her longer term

What utter bollocks. I worked a few hours a week from age 13 paper rounds, babysitting, mucking out horses, then in retail as did just about all my school friends and also while at university. I don't know where it's come from that students can't work and study.

I got a first in a STEM subject and am now a successful professional, recognised internationally in my field.

My parents never gave me financial help. The help I got was much more valuable. Time to study, get good grades, focus on getting a good career.
Mi did do summer jobs at 18 plus but that too not for the money but for the experience. Money was a bonus. Focus was always on education.

That to me has been 'wealth' enough.

It was a good aim, but sadly, virtually impossible these days with such high rent and utilities. My son has the cheapest/tiniest one bed flat he could get and has a good graduate job, but probably 75% of his wages go on rent, electricity, rates and insurance, and that's not even including his food. He easily spends all his wage and still struggles and has to buy whatever is yellow labelled in the supermarket and really has to restrict socialising - where he works, a basic pint of lager is close to a tenner in the pubs near his workplace. He actually had some savings beforehand and he's burned through it all in just a year.

Washing pots and pans at 15 brings u in contact with the same hand to mouth mindset.

Your daughter needs to fulfill her potential and for that the right type of environment

I agree with all the above except the not working bit. It's good for them to see how hard you have to work to earn a pittance in under 18 NMW jobs and how little it gets you - a great motivator to get on with school work to avoid ending up in that sort of work tbh.

The two things I would add are

1. Teach her how compound interest works so she can appreciate both sides - ie how savings and investments mount up over the long term but also how a high rate of interest on eg an unpaid credit card can rack up the debt.

2. Over the summer holidays get her to meal plan shop and cook on a set budget so she understands how you need to stretch money out.

WHen my DC were at primary school they had to do the dreaded shoe box and I gave them a budget and a list of things to buy to fill it. The sooner they learn how to stretch limited funds the better imo.

Put 25% of what you earn into savings
Set up an isa
Keep a good float in your current account for sudden expenses.

Get her working and spend half, save half. It gives her a work ethic and hopefully savings to pay for driving lessons and a car when she's old enough which then gives her more freedom.

Can you look at progressing at work or retraining yourself? Look at ways of surrounding yourself and your family with people who have a growth mindset. Do some reading up on it. Watch YouTube videos on it as well as on budgeting, investing and saving. Martin Lewis' money saving expert website is good for beginners too.

Teach her to work smart, not hard. Always do your job and do it well but never ever be the first to arrive and the last to leave. Always have a (preferably self-employed) side hustle outside of work like private tutoring or selling things or whatever.

This sounds hard.

Are your tax credits topping up low wages?

Not sure some posters here have much understanding of what being on a low income means - stocks and shares investments, saving 25% of earnings (people who have so much left over after essentials probably don't qualify for tax credits, put it that way).

You can't compete with DD's friends' parents, but she can open a bank/building society account with a very small amount of money. I didn't have much money to give my kids or save for them, but my dad offered to give them an allowance so we opened Nationwide Flex One accounts for them at 12/13. Perhaps you could do this with your DD and give her a small amount out of wages/tax credits/child benefit, or control over money which you would need to spend on her anyway, on dates when you have money coming in. How do you and DD pay for her clothes/shoes/stuff for school, or for meals if she has to pay? Do you have family who give her presents?

Can she help you with shopping for bargains? Do you use supermarket loyalty schemes, and if you're able to save £10 in Nectar or Clubcard points, say, can you use those towards food shopping and give your daughter the amount of money saved that way towards her savings? There is a Nectar Canvas website where you can earn a few extra points by filling in rather boring surveys, and they seem quite keen for me to get my sons (15 and 17) to answer questions on stuff too. I've said no so far not because I'm unwilling for them to do it but because I often end up doing the surveys when they're in school/out with friends/in bed - and even if they are around I think they have better things to do with their time even if I don't!) but maybe if you can get, say, 40p/80p worth a time that way you can give her the equivalent cash when you get enough to save something on shopping, or put it in her account (even if it is in quite small amounts).

Is she in year 10 or 11, and does she have an idea what she wants to do after GCSEs? A levels or vocational training, higher education?

@taxguru Your son would be much better off if he lived in a shared house. That sounds really unsustainable - he's living in a place that is far too expensive. He must feel he's working just to exist.

I didn't get any help from parents outside my pocket money which was £30 a month between 13 and 16 yo then I got a weekend job and pocket money stopped.

My best advice would be that she get a weekend job and from the beginning put a proportion of that into an ISA with the amount increasing proportionally with any pay rises. When I think back to how much money I just wasted as a teen when it was all disposable income I do feel a bit of regret, I could have saved thousands without even really noticing it.

I also have a thing set up with NatWest where it rounds up any debit card spends and puts the pennies into a savings account, so if I spend 95p on my card, it rounds it to £1.00 and 5p goes into savings. I racked up about £1000 in a year in that account just from pennies here and there.

Shared houses even more impossible to get. He's tried and tried. University city!

Get her Psychology of Money book from Amazon. There us a story of a humble cleaner who died a millionaire through sensible saving and investment habits. And don't beat yourself up, you are doing a great job under very difficult circumstances. Your career advice sounds superb