We’re continuing our Teen Money Week on the blog by putting the spotlight on digital money and how young people can use it to their advantage. If you’re trying to assert your financial independence for the first time, the world of online accounts, pre-paid cards and monitored spending could be just what you need. Here’s how to ease your way into digital money – and why you should still let your parents keep an eye out for you
At least half of you have had access to a phone or tablet from the age of eight. And of course there’s now an app for everything. So it’s no surprise that banks are jumping on the bandwagon, offering new ways to manage teenage allowances online. There is now an array of digital services which allow parents to pay you, reward you, and get you thinking about saving. And it all happens without any coins or notes ever changing hands.
Okay, physical cash isn’t totally dead. You may have to traipse down to your local bank branch on Saturday morning if your uncle gives you 50 quid for your birthday. And some of you might still be popping the odd tenner in a piggybank or even a fancy Terramundi pot.
Debit cards still allow you to withdraw cash from an ATM while you’re out and about. A really helpful hack is to take out as much as you can afford to spend for the week or weekend and leave your debt card on one side. This way, you don’t burn through your money so quickly.
Debit cards also enable us to buy stuff in stores and online without the need to count up pennies. Contactless technology means we can tap and buy goods worth up to £30. We don’t even need to type in a PIN number for most transactions these days.
Learning to handle money online is a useful preparation for adult life. You may already be setting up direct debits and standing orders for regular payments like subscriptions or memberships.
Perhaps your parents realise this and want to pay you a digital allowance rather than physical pocket money. Some services allow parents to transfer real money via their own debit card or bank account to a young person’s account. You get a prepaid debit card that can be used to buy things on the high street or online. Parents are often allowed to see what you’re doing with the money, receiving text alerts and online statements. They can even restrict how much you spend and where. Of course, we can see why Mum and Dad might like this but why should you let your them ‘snoop’ on your spending? Well, it builds trust within the family and provides reassurance that you’re using the money well. So the nagging might stop (or at least get less frequent!)
Plus, your parents can identify and tackle expenditure that is poor value for money. That way, they can help you to become a much savvier consumer. Who doesn’t want that?
Special digital accounts for teens typically promote incentives for doing tasks around the home (so you might be in line for a bonus the next time you wash the car). Many of them also encourage users to donate to charity and save for particular treats, providing huge satisfaction when the target amount is reached. Far better than the quick thrill but guilty feeling that comes with buying something you can’t afford.
Since you’re a digital native, you probably don’t know what life was like before cash. In many ways, it was a lot simpler to know exactly how much money you had in your pocket, and how much you could afford to spend. Online banking, whilst convenient, feels a lot like playing digital Monopoly. We may not appreciate that those numbers on a screen represent ‘real’ money – and once it’s gone, it’s really gone. But we can all use technology to our advantage, to keep money for what really matters. And if you let your parents in on the act, they will almost certainly reward you for it.
- Osper (osper.com) is a handy debit card and budgeting app rolled into one. Your parents can also download the app and send money to you on the go.
- You should be receiving financial education at school in one form or another but you’ll get more through the Top Marks (www.topmarks.co.uk) website. It provides interactive money games and links to helpful external resources, notably the Counting on Money programme, sponsored by the Nationwide Building Society.
- If you want to learn more about the stock market, the Fantasy Stock Exchange (fantasystockexchange.biz) is a fun and informative website that turns investing into a competition; winners receive a £250 voucher to spend at Hamleys.
- RoosterMoney (www.roostermoney.com), a similar service to Osper, also offers an addictive virtual game, Rooster Village, where players can earn “Roosties” for completing challenges – and you’ll get to know a bit more about money along the way.
Onwards and upwards! And remember…