If you are a parent of a young child, you may not yet realize that kids are expensive! Statistics from the UK indicate that each of your children will cost you approximately £230,000 to raise! Parents of teens soon realize that this is a very expensive stage of their lives. Whilst they may be able to earn some money themselves, they are also very good at spending it and it is the parents that have to provide the backup.
Teens compared to younger children – the facts
Our perception of how expensive it is to raise teens may not reflect the facts of the situation. UK insurance firm, Aviva, recently conducted a comprehensive survey among parents and came out with some surprising results.
It seems that teens are not the most expensive children after all. A teen actually costs less per year than children aged one to four years of age. The simple reason for this is the high cost of childcare. Parents pay a huge proportion of their salary each year to child care providers so that the can go to work. You don’t have to do that for a teen.
Teens do like to spend money
Teens are just starting out in the world as consumers. This makes them a marketer’s dream. The phenomenon of ‘youth marketing’ is big business and brands spend a lot of money trying to attract teens. The rewards are obvious. Teens are at the age where they are developing brand loyalty and companies are trying to pick up life-long customers who will buy their product for many years to come. Teens are not already fixed to a particular brand and are therefore more open to persuasion.
Teens can also act as a portal to the rest of the family. They are curious and interested in new products and can be the gateway to family spending in general.
The concept of a ‘teenager’ as we know did not even exist until the 1950s but brands were quick to latch onto them. Teens are desperate to fit in with their peer group and are highly influenced by celebrity culture and what they see and read on social media.
How do teens spend money?
Teens, in general, are too young for a credit card which is probably a good thing. Older teens may be able to get one but you need to sit them down and explain how credit cards work to stop them from getting into financial difficulties. There are plenty of options for how teens can make and spend money on Fortunate Investor.
They will start off spending cash, which they may have saved up from their pocket money or money that they have earned from doing household chores. As they get older they could move onto a pre-loaded debit card where you can transfer money a bit at a time and they cannot go over a certain limit. The downside is that some of these cards charge a monthly fee and charge you to transfer money over to them.
Once your teen has opened a bank account they will be issued with a debit card associated with that account and they may be able to access online banking so that they can easily check their balance.
What do teens like to spend money on?
It may come as no surprise to you that a 16-year-old will cost you the most. This is partly due to the expenditure on birthday celebrations. It seems that parents like to splash out on expensive gifts for their 16-year-old. Items such as smartphones, tablets, and laptops are not cheap. In some USA states, this is also the age where they learn to drive and parents have to bear the expenditure of lessons, insurance and maybe even a car. Teens like to party, that comes as no surprise, and birthday parties can cost a lot to organize.
Holidays are certainly more expensive at this age. You are no longer able to take advantage of free child places and child fares. Many holiday companies treat kids over 11 years of age as adults so you will have to pay out for the full price. As well as going on holiday with you, older teens may be traveling with their friends for a short break or participating in a school trip and so parents find themselves funding two trips.
Clothes and accessories are also more expensive at this age. Bargain store hoodies will no longer suffice.
Teens and earning money
It is difficult for young children to earn money because employment laws and insurance limitations prevent them from seeking employment. They could do chores around the house for you and you could pay them for doing that. However, most teens over the age of around 14 years will be earning money outside the home in some way. The classic first job is delivering papers and they can fit this around their school work by doing it early in the morning.
Older teens make very good personal tutors and can make a lot of money doing this. They have just been through the course themselves and are very familiar with the curriculum and the style of exam questions. They can also pass on tips and techniques that have worked for them.
Many teens work in retail or the hospitality sector as shop assistants, waitresses or porters. The work can be fun and varied and they learn some important skills that will look good on their applications for further education and university. Transferable skills such as meeting deadlines, teamwork, and communication are highly valued by academic institutions. If they can combine their job with some work experience that is relevant to their future career that is even better.
Parents have a responsibility to equip their teen kids with the financial skills to navigate persuasive advertising in the future and manage their finances. Giving them some financial responsibility for their spending early on provides valuable skills for the future.