Manageing money and teaching children to budget

[Aeldermum]

My oldest child budgets well, but now she is old enough to have a bank account she needs to learn how to use cheques in order to look after her money well.

I feel very strongly that the use of a cheque book is essential for young people: it is the safest way to transfer money between members of a family, and pay for goods and services. It also encourages the keeping of a written record of payments made, and therefore greater control and awareness of money spent.

If our young people are not to fall into unseen debt, by giving up control of their method of payment, the cheque must be available.
I see it as one of the many ways people can choose to pay, to help them budget.

By teaching children how to keep simple records of their spending, showing them how to handle a credit card for their internet payments, and using a cheque book for recording larger payments, recording their cash withdrwals from ATMs, and reducing the direct debit withdrawals from their accounts as much as possible, puts them in control of their money and reduces the danger of debt.

Personally I find internet banking the safest way to transfer money to family members, a cheque would take too long, but that is down to living abroad.

I also prefer to use internet banking for paying people who do work on my house which is rented out - the payment can be traced, and it leaves my account fairly instantly, rather than waiting for it to get to UK, and then waiting again for the tradesman to cash it.

OTOH, when I am in UK, I write cheques for birthdays and Christmas, and hand them over in person. I also have to use them when a tradesman doesn't have electronic banking. I liked cheques when I was in the UK because I would come to the end of a chequebook, whereas with a debit card I would just keep using it.

However, I am now in Belgium, where they don't have cheques, and the system works. Bills are either paid on line, in the bank or at the cash point, where they have dedicated machines for paying bills.

My 14 yo ds knows how to use a credit card for internet payments - he's watched me often enough.

I don't see the problem with DDs at all - it's great way to make sure things are paid on time - I scroll down the list once a month, and see how much is left to go out, so I know where I am.

The whole money question for teens is interesting - some kids at ds's school get stacks, he gets 20 euro a month, but we pay for everything else; the kids with more have to buy their own clothes, school lunches, mobile top ups etc. I don't do that as he would spend it all on computer games and have no trousers.

I am glad you are teaching your children how to manage their finances Aeldermum. This is something that really isn't taught in UK schools yet is one of the most important skills they will need as adults.

I think cheques are rapidly going the way of the dodo however and internet and phone banking will be usual for everyone soon. They will just be used for children's birthday presents and similar. Sound like this is what is already happening in Belgium.

Our DDs get pocket money but we buy their clothes, books and stuff for school. I never quite know where to draw the line so they do rather well me thinks.

I don't think cheques are essential for learning to budget.

ds1 is 12. He has a current account with a debit card. Every month he gets a standing order from us, which covers bus fares, school dinner money plus pocket money. Then it's just over to him to manage it. He pays for his own cinema tickets, clubs and activities and so on.

He has an account book, where he enters all transactions on his account, which he then balances against his statement every month.

This written very strangely, as if it's a page from a book from the 80s on learning to budget.

Cheques are outmoded and slow. Internet banking is safe, quick, and lets you se all transactions. When you make an internet transfer the statement willtell you where the money has gone. With a cheque it is only the cheque number that is recorded, not the recipient.

Direct debits are incredibly useful, as you always know what will be going out and can never forget and end up paying penalties for late payments.

I don't think learning to use cheques is so important these days for young people (and most of us)although certainly my parents and MIL use them much more.

My DS (17) has had a bank account for a number of years and we transfer about £80 pm plus lunch money of about £3.00 pd paid termly. Last year he worked for the summer earning about £600.00, he has never written a cheque and does not have a cheque book and had certainly not fallen into debt.

If he wants to purchase an expensive item - laptop, inline skates etc. - he saves or negotiates for us to buy on our credit cards paying back over a month or two.

When he was younger his debit card was not accepted in many shops which was tricky as I don't think it's great to walk around with a lot of cash but now the debit card is accepted there are no problems.

Think most people get into the habit of debt when they don't have to face the consequences of their actions e.g. parents bail them out when they overspend. When people know they will have to pay back debt themselves and no parents / knight on a white horse will bail them out I find that concentrates the mind.

Thanks everyone for your great replies.

It must seem to you that I'm against more modern ways to pay, but I find writing things down so quick and easy that I expect other people to too. I make lists... I have shown my DD my method of credit card use on the internet, which keeps it free, as it's always paid off in time, and she uses that for her internet payments... it's so simple.

To me, cheques are just another great way to pay and record at the same time. My debit card has no automatic record, unless I get a receipt, then I end up with lots of little scraps of paper, none of which record the full picture.

Next my dd goes to university, and she will be far more independent. I think she will choose to pay for her accommodation by cheque, but she might use a debit card. It's for large isolated payments like this, where clearance time is not an issue, where I think cheques are great.

When I give money to a child, I have given bank notes, but they are so easily put into a purse, spent and forgotten. Sometimes I give vouchers, but they are almost as impersonal, whereas a cheque is a unique item of worth, and I love getting them myself!

Having read all your comments, I think it is teaching children about money management and budgeting that count, not necessarily the methods used. Thanks.