Teenage guidance on Personal Finance – Cost of Living, Savings, Debt, Investing

My eldest son is 14 and today is doing work experience for Mrs Mummypenny. I asked my Twitter following to suggest some discussions about personal finance, this is resulting article that he has written. Some of these questions are tough and I urge you to talk about them with your children, how is their understanding, interest levels? Also he enjoyed doing this. And I’ve got to say I am super impressed with his knowledge.

Do any of the answers surprise you? I haven’t changed a word so this is 100% DJ’s views and opinion. The only question that he didn’t understand was compounding (so googled it) , that, to be honest, few adults understand anyway!

What are the household bills that our family must pay for?

The household bills paid in our house are phone bills, electricity, insurance, taxes, water, and heating.

How can you help the family to save money monthly?

To help my family save money monthly, you can have a budget for yourself on how much to spend. This will help you not to overspend within a month. In addition, you could limit your family for going out for treats. This is effective because, our family spends a lot of money on takeaways and going out, this would reduce our spending monthly.

What does inflation mean to you?

Inflation to me means to me that, the cost of living is increasing. Some examples of this are: fuel prices increasing, gas bills increasing and value for products increasing. My opinion on inflation is negative as this lead to an increase in poverty and homeless people.

How do you think we should help people get better with their finances?

To help people get better at their finance they should follow people like my mum to use advice from these people. You should also limit spendings and put enough savings for things like pensions, emergency money and savings for bills.

What jobs can teenagers do to earn extra pocket money

Jobs teenagers can do to earn extra pocket money are jobs like post boy, window cleaner, gardener, babysitter, dog carer and a cleaner. I believe it is necessary for a teenager to make a business like one of these because you can actually make a lot of money from these jobs if you’re doing the right things.

Should you get an allowance and buy your own clothes etc?

I believe you should be given allowances, but you can’t overuse this. Allowances should be given because, this will educate your children on their spendings. Also, these allowances could be used for essential, for example clothes.

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What events should you save for?

Events you should save for are pension, bills, emergencies, buying a house, buying a car and money for your kids when they come of age. This is important so you don’t find yourself with no money in a situation, this therefore means you won’t have to get loans from the bank and things like this.

What would you do if you were given £1000?

If I was given £1000, I would save £900 for essentials and use the £100 to have a bit of fun or have a treat. Saving that amount of money is important because if this wasn’t saved, it could lead to things like debt.

What are you taught in school, and does it make you feel prepared for adult life?

In school I’m taught basic finances. Some of these things are taxes, credit/debit cards, banks, pensions, and currencies. This does prepare me for future life; however, I’m not actually doing these things. This means I don’t know the details of these subjects.

What is the difference between debt and savings?

The difference between savings and debt is that debt is when you owe the bank a sum of money, however savings is not where you owe money you are putting aside for the future. If you don’t save, this can turn into debt.

Do you know what a credit score is and what it means as an adult?

Due to research, a credit score is a number between 300 and 850 this shows the creditworthiness of the owner. The higher the score the better. A credit score is based on your credit history, for example debt and number of open accounts. This is important for an adult because your chances of being accepted for loans depends on your credit score.

How can mummy pay off her 300k mortgage

My Mum can pay off her 300k mortgage if she pays her monthly deposit consistently. She can achieve paying her monthly deposit by working hard by completing assigned jobs and make sure she saves for this deposit every month.

What is insurance and what events should you insure against?

Insurance is a way to manage your risks. When you have an insurance, this is protection for unexpected financial losses. The events you should insure on are car insurance, health insurance, home insurance, life insurance and travel insurance. You should insure all these topics because this will protect you in emergencies.

What does investing your money mean?

Investing money means to me that you put money into shares, properties, Crypto, and products. You do this to achieve profit. However, you shouldn’t spend to much on these things because you won’t always achieve profit, you may lose money. My overall opinion on this is both negative and positive because you can profit but there is a risk of losing money.

Do you understand the impact of compounding on your savings/investments?

I don’t understand the impact of compounding on your savings and investments. Due to research, the impact of compounding on your savings and investments is that you earn interest on top of interests itself. The impact it will cause is that your savings and investments will increase in value as every year your interest on the savings and investments has increased.

What is retirement? How would you encourage children to save for retirement? How much do you think you need to save?

Retirement is becoming of age and stopping the need to work. You could also retire due to an illness. To encourage children to save money I would educate in school and outside of school to show them the importance of this. You could also encourage them by demonstrating this yourself as a parent and show your child the benefits for saving for retirement.

What is cryptocurrency, and should you invest in it?

Cryptocurrency is a digital currency where you invest money, and your cryptocurrency will either increase in value or decrease in value. I believe you should invest in it, but you should only put little amounts towards this because if large amounts are invested this could lead to debt.


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Lynn Beattie

Aka Mrs MummyPenny

Personal Finance Expert

I write about personal finance made simple, lifestyle choices that will save you time and money, as well as products and services that offer great value.

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