One year in: lessons learned from teenage budgeting

This time last year, we began a bold new endeavour to teach our early-teenager something about the value of money. We switched from weekly pocket money to a living allowance paid into a Spriggy direct debit card; we negotiated a contract; talked about budgeting; and encouraged him into his first casual job.

It should come as no surprise, especially if you’ve been following along, that it hasn’t been smooth sailing. Mr 14 is a frequent spender, buying little things regularly, like hot chips and Slurpees; and, both Mr 11 and Mr 14 are gamers, buying Xbox Live credits, skins, games, and replacement controllers. It meant that practical expenses like clothing and haircuts were avoided, in favour of free vendor t-shirts we picked up from conferences and the occasional haircut donated by his mother (*cough*) when she couldn’t handle looking at the greasy mop anymore. There are also no savings, despite Mr 14’s desire to save for a better computer.

Last post, I talked about switching Mr 14 up from a weekly to a quarterly allowance in hopes of accelerating the lesson in budgeting. But, in spite of the top-ups in allowance that come from both his casual letterbox drop jobs, he was skint before the school term was out and didn’t have any cash available for the holidays or for buying Christmas gifts.

Truth be told, I was expecting him to come to us part way through the year and renegotiate, but he never did. This is an attribute of his personality more than anything else. I know some kids that bargain until they’re blue in the face. I urged him to take this 12-month milestone as an opportunity to review the contract and see what levers could be pulled to change his situation. We had that talk yesterday.

We will be continuing the quarterly allowance payment, but we’ve changed some parameters. Mr 14 requested an increase from $50 to $80 per week. We had to coach him through framing the justification; it’s a big jump, and his proposal wouldn’t have cut it had he taken it to an employer. We agreed to $80, but with some adjustments:

  • We’ll take $15 per week, straight off the top at the start of the quarter, to put into a dedicated, hard-to-get-at savings account. Sorta like what happens with superannuation. We may use a dormant online savings account that we already have, find a youth savings product or give the Spaceship Voyager investment account a go. I’ll keep you posted.
  • Mr 14 will have to get off our phone plan and pay for his own. He chews through a lot of data but doesn’t feel that when it’s all absorbed under our unlimited business phone account. Do you have any recommendations? We’ve been looking at a Vodaphone sim-only pre-paid deal.
  • To earn the increase, I’ll be recruiting Mr 14 into some of the meal planning and cooking. He does occasionally cook, but I’m haphazard with grocery shopping and meals, so it’ll be good for both his and the household budgets, if we get a bit more disciplined as a collective.

All-in-all, though I wouldn’t declare it a successful outcome, this first year of observing how Mr 14 handled his own budget has been interesting and worthwhile. We’ve always treated it as an experiment, anyway, so while it isn’t a success, it’s also not a failure. There are good things in the mix: he saved some cash early in the year to spend on shoes he wanted; he bought his own ticket to a concert; he increased his casual workload by getting another flyer distribution customer; and he’s primed and ready to apply for work at some nearby retail chain stores. This all happened in a year of typical turbulent teenage changes that happen between 13 and 15 years old, and I’m proud that we’ve all made our way this far through.

One constant through the experiment, so far, is what I hear from other parents when we talk about Teenage Budget, or some aspect or other of our allowance setup. Even financially accomplished and successful investors are not talking to their own kids about money, and several of our friends have admitted they wouldn’t even know what to say. That’s why we want Teenage Budget to be a transparent record of the lessons we try to teach our kids about finance. If nothing else, it provides tips and some subject matter to trigger a discussion or an experiment of your own, like it did for this one.

Inspired by the team @TeenageBudget, we’re kicking off our very first financial experiment with the kids. 3 jars for Saving, Spending & Giving.

Anyone else tried something similar?— Dads.Co (@dads_co) September 4, 2018

How are your experiments going? Are you reading the latest Barefoot Investor for Families book? I’d love to know what you’ve been working on and how it’s been going, so consider sharing a guest post.

We do not have a commercial arrangement with Spriggy, except as customers, but if you sign up with this affiliate link, your account will come pre-loaded with $5 and our account will be topped up with $5, too.

I have a confession: we need a change of plan

Remember, back at the start of this Teenage Budget blog, our contract for the living allowance included a phone payment? We were supposed to take $40 per month, but we forgot and have let it slide all this time. We also continue to see Mr14 NOT budgeting, because he’ll, “get $50 again on Sunday”. A colleague of Matt’s, with grown-up kids, said he didn’t see budgeting kick in until he switched his kids to a 6-month lump sum. They only ran out of money once and are now pooling funds together to buy a house.

So, I can see what we need to do. On October 1st, we’ll give Mr 14 3-months’ worth of allowance and we’ll see how that goes. He still has his two flyer-delivery customers to top up his funds. And, we’ll take the phone money out, in advance, as a deduction.



Building relationships

We’ve all heard the saying, it’s not what you know, it’s who you know. Even so, they don’t teach it at school. For the past year or so, Matt and I have been taking the kids to evening work events put on by one of the professional circles we mix with. Taking the kids along to these events means they become familiar faces to some of the people we know, and vice versa. There are lots of other incidental benefits worthy of other work/life balance blogs, but where Teenage Budget is concerned, we wanted to introduce our kids to people who they may be able to reach out to for their first internships or works experience opportunities later on. This is certainly the kind of social engineering a parent takes on, but what I’d never thought about, was the networking kids are unconsciously doing on their own, whenever they become familiar faces at a corner store or takeaway shop.

Mr14 has been routinely spending part of his living allowance on hot chips from the nearby fish & chip shop. He’s in there so often, ordering chips with extra chicken salt that, soon enough, the owner of shop came to know him by his order and struck up a conversation. He asked Mr14 whether he had a job, to which he brought up the flyer distribution, and a deal was struck. Mr14 would deliver a box of a thousand menus for $50 cash. That’s $5 more per 1000 than the flyer distribution company, and, if he lines up to deliver menus at the same time as he has another letterbox run going, he doubles his money for the same time and effort out walking. He’s yet to coordinate both to happen at once, but he has just collected his first $50 cash payment, and can now claim he has his first direct client and he created that relationship entirely without us.

Currency conversion challenge

We escaped the Melbourne weather for a holiday in warmer climes, last week. Most of the time, we stuck to the pools and the games room, but we did get out to explore the local village shops in Khao Lak and do a bit of sightseeing.

It’s not unusual for us to do the currency maths out loud with the kids when we go out eating or shopping. It’s even better when we travel somewhere with an active cash economy, like South-East Asia, because the different appearance of the local currency is engaging to the kids.

So, I decided to set a challenge after having done enough rough currency conversions while we were on the go earlier in the week.

We gave Mr 11 and Mr 14 some Thai baht and challenged them to spend as close to AU$10 as possible. We ran the challenge in the nearby 7eleven and they were allowed to choose whatever they wanted. They were instructed to each get a receipt and we would convert based on the current conversion rate from THB to AUD. The one closest to AU$10 would get a bonus $10 loaded onto their Spriggy card.

After loading up on all the snack foods and hitting the registers, here’s where we ended up. Mr 14 on the left, Mr 11 on the right.

Lucky Mr11 gets the bonus, and Matt retrospectively wishes we’d stipulated $10 or UNDER. Too late, mate. 😆

Recognising a bad deal

Mr14 and his mates occasionally go to a 24/7 computer-gaming lounge to play Fortnite and what-not, because some kids are on PLaystation and some are on computers or Xbox and cross-platform matches aren’t possible. (See?! I know what’s going on!) They decided to try a new place, recently, because it was cheaper than the usual place.

I got a text an hour after they started saying, “this place is ass”, because other people were smoking inside where they shouldn’t be, and the internet was “balls”. They were denied a refund, probably because they were teenagers and didn’t know how to respond. Mr14 had just been paid for a recent letterbox drop, which meant he was cashed up to solve the problem, and he offered to buy the group a gaming shift at the usual place.

It was lucky he had the money on his card for the group to be able to stick to their plans, but it was a good experience in handling a bad deal. They tried. In the end one of the dads called the crappy place and demanded a refund, so Mr14 got his original money back and his mates repaid the fees he stepped in to cover.

Have your kids had to stand up for themselves over a bad deal? How did it go?

Unexpected generosity

Photo by Annie Spratt on Unsplash

Mr10 turned 11 about a week ago and I think it’s probably not uncommon for a parent to do the gift buying on behalf of the rest of the family. That’s what I was expecting to do when Mr14 announced his intent to buy a JB Hi-Fi gift voucher for his younger brother. I gladly took Mr14 and his girlfriend to the shopping centre and went my own way to buy Mr10>11 a pasta machine for his birthday.

Imagine my surprise when we reconnected an hour later and Mr14 had bought a $50 gift voucher and his own card! The card was Ms15’s idea, but both Matt and I were happy to see Mr14 being so generous, in spite of limited funds. Never mind the slightly self-serving intent behind the choice of gift and articulated in the birthday message on the card—”now you can buy your own Fortnite Battle Pass”.

However, it does demonstrate that he lives week to week in comfort, knowing that he’ll be getting $50 again, come Monday. Still no savings, and still prioritising leisure and takeaways over haircuts and clothing. He’s just about grown out of his winter wardrobe and it’s taking all my effort not to leap in there and save him with some cheap Kmart clothes. 😬 Oh wells!

Big ticket items

Image by NRK-P3

If you’ve been reading Teenage Budget for a while, you might remember we incentivised Mr14 to save some money by offering an extra $100 if he still had $200 at the end the last school holidays. Well, he made it. Aided, in part, by losing his wallet with his debit card in it. Forced savings, indeed. So, he scored his bonus, minus the $10 card replacement fee.

Now that we’re coming into Winter, I routinely point out that it might be a good time to go opp-shopping at Savers. But, as long one still fits into the tracksuit pants, why bother?

“I don’t want to spend the money”, he says.

Fair enough. Although, let’s just ignore the death by a thousand paper cuts that comes from buying the Slurpees and chocolate bars. And the potential for diabetes.

Instead, he bought his own ticket to see Kendrick Lamar in concert and will be going with a bunch of friends. He doesn’t seem to be particularly impressed with himself for funding his $180+ ticket purchase. I asked him if it feels good to have bought his own ticket.


“What if you had to ask us for money to buy you a ticket? We might have said no.”

“I guess.”

Pfft. Teenagers. Maybe it’ll be something he remembers later on, once he’s had the experience of being there.


Teenage Budget is on Facebook. Are you running budget experiments with your kids? Share your attempts and frustrations with us.

5 ways to start a money conversation with your kids

Most people parenting teens grew up in households where the financial discussions happened betweens the adults. While you may have been encouraged to get a job and do the grocery maths, you might’ve grown up shielded from the learning opportunities that come from making financial mistakes. I was saying to a parent-friend of mine the other day, that owning up to money mistakes feels similar to exposing the way you lost your virginity—risky, awkward, and even embarrassing. This guest post on Teenage Budget, from the team at Clover, came with perfect timing. Thanks for sharing it!

There’s more to life than money – and it doesn’t necessarily make you happy. And, as The Beatles so famously crooned, money definitely can’t buy you love.

But that doesn’t mean it’s not important – or that you shouldn’t find a balance between understanding the importance and power of money, and not letting it run or ruin your life.

So while it won’t buy you happiness or love, imagine your kids growing up not knowing how to make, save or invest it. Imagine that ‘budgeting’ or ‘finance’ are foreign, meaningless or swear words to their ears.

Now consider this: When it comes to what your children know about what money is and how to manage it in their lives, that’s almost entirely up to you.

First, there’s leading by example – meaning your kids naturally take in your attitude and habits when it comes to money, spending and debt, simply by being observers.

And then there are those sit-down conversations about money over a TV dinner. Are they important? They sure are. Here’s how to start one of them:

  1. Talk about your money mistakes

There comes a time in every kid’s life when they realise that their parents are fallible people, too – and it’s usually a moment of deeper connection.

Yep, we’ve all made money mistakes, and most of those mistakes are filed under regret. You didn’t invest early enough. You racked up too much credit card debt. You spent too much on your wedding.

By openly talking about these little and big mistakes, not only will you reveal yourself as a real person to your kids, you’ll provide an insight into how you came to be wiser about what money means.

  1. Talk about your income

It’s not too hard to start talking to your kids about what money is for. “Look around,” you can tell them over the dinner table. “Money paid for the light in the room. The heat in your roast chicken. The socks on your feet. The app on your phone.”

But these days, particularly as we pay for groceries by pushing a bit of plastic onto a PayWave scanner, children can almost forget that money is even a tangible thing. They can fail to fully understand why you’re attracted to those ‘Special’ labels on the supermarket shelf. And they can almost not realise that getting up and going to work is not just a sensible-adult-thing-to-do – it’s to charge up that magic card with real money.

  1. The media you consume

As a kid, I vividly remember my Dad exclaiming ‘I hate this advert!’ during an evening soap. I didn’t really understand why. It seemed bouncy and colourful and giggly enough.

But now in 2018, even smarter advertising is pretty much everywhere – on your kids’ apps, their YouTube videos, their websites and even in the form of almost subliminal product placement in shows and movies.

Children can so easily be persuaded by the product that has been placed in that movie – so let them know exactly why a company might be doing such a thing. Entertainment is cool, but commercial scepticism is crucial.

  1. The things you love

All of us have hobbies, passions, loves and goals. Maybe yours is cycling – requiring a flash-as-can-be $10,000 road bike. Maybe it’s an end-of-year overseas trip. Maybe it’s a cushy retirement and an endless stream of five-star cruises.

Your kids need to understand that while these passions and goals are what life is all about, they also require budgeting, saving and investing … boooring!

In other words, skipping a Sunday breakfast at the cafe, accepting some overtime, or setting up an account at Clover may not be for immediate Millennial-style gratification, but instead part of a grander scheme that will pay off nicely a little further down the track.

  1. Your money attitude

Just as the world of advertising wants you to almost mindlessly consume its money messages, it’s the same deal beyond that as well. For instance, your credit card company tells you the minimum amount to pay – but doesn’t necessarily tell you that it’s much wiser to pay a little more back than is recommended each month.

It’s the same when you’re dealing with a company or a boss. Product or service not good enough? Tell your kids how you dealt with your demand for a refund or your complaint. Angling for a pay-rise? Let your kids know that there’s a fine line between being a nuisance and being assertive enough to get what you really deserve.

Money and kids: It’s a balance

Yes, talking to kids about money is a balance. Finance is not everything, and it’s not the key to happiness – but getting a firm understanding of how the financial world works and a healthy attitude towards money is much more than empowering for your kids – it’s nothing less than a key to financial freedom. So while not making it THE topic of dinnertime conversation, definitely don’t make it a taboo, either. Bon appetit!



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Employing the stick

Last time I talked about Mr14’s preference for the stick. Or, as educators call it, negative reinforcement. Before I go on, negative reinforcement isn’t making something bad happen to you, if you don’t do what you’re supposed to. Negative reinforcement is when something stops happening as a result of you doing what you’re supposed to. It’s like the seatbelt alarm in your car turning off when you plug your seatbelt in. It’s the reward of taking that annoying noise away, it’s not the application of punishment. In Mr14’s case—he delivers his flyers, we stop nagging.

He broke his arm skateboarding a couple of weeks ago, and he had less than 30% of his delivery workload left to do. Matt and I were prepared to help him get it done when he declared he was fit enough to do it himself. He could still carry his backpack with the flyers in it and could wedge a bundle in the sling. No problem! After he left, I couldn’t believe he hadn’t taken the last two bundles. It was probably the last 30 minutes of walking that he would have to do for this batch of work, and he’d decided to put that off. He may never appreciate the psychic burden I felt on his behalf!

When he got home from his morning delivery route, what do you think we did? Well, it was Matt, mostly. We had a discussion about delaying the last bits of work that still need doing, and how much better it would have felt if he was able to come home knowing that it was all done. So, we got the stick out—as per his stated preference—and made him finish the delivery.

The moral of this post is: you eat the frog, or it’ll keep croaking at you!

Money, motivation and teenage enthusiasm

We’ve had some interesting conversations with Mr14 relating to motivation. He’s been wanting to save money to buy his own gaming computer, but he doesn’t have a good track record with saving. This gaming computer is a frequent subject of Mr14’s conversation and research, and with school holidays on us again, Matt reminded him of his holiday spending habit. That is, ending up with $0 at the end.

We’re the types of people who like to dangle carrots, but it doesn’t seem to work on Mr14. I recently tried offering him money in exchange for paying more attention in class, but he wasn’t interested. We’ve also offered to match any income he may raise through busking. He said no to that too. So, it prompted us to ask last night, “do you prefer carrots or sticks?”. After explaining what we meant, he said that he responds better to sticks. He’d rather avoid losing something by getting the work done than to get the work done and gain something.

That’s consistent with the evidence of the past month. He’s managed to save some money purely through not having access to it— because we hadn’t topped up the parent funds on our Spriggy account. That’s what we call forced savings, and adults achieve that through tax or utility bills by routinely overpaying, or by channeling automatic payments into an interest-bearing account.

For now, Mr14 is swimming in cash. He’s finished a big letterbox drop and he’s just had his delayed allowance payments drop into his card. We’ve got two weeks for this school holidays. Let’s see how he responds to Matt’s latest carrot: if there’s at least $200 left in the account at the end of the holidays, he’ll give Mr14 $100.

Does your teenager respond to sticks or carrots?


We do not have a commercial arrangement with Spriggy, except as customers, but if you sign up with this affiliate link, your account will come pre-loaded with $5 and our account will be topped up with $5, too.