Money Manners is Honey Money’s weekly column that deals with money etiquette matters that can be the cause of many an awkward encounter.
Submit your Money Manners questions to Jo Abi at jabi@nine.com.au
This week’s question comes via a 9honey reader who has a money question about her teenage children who live at home.
Dilemma: ‘What bills should I pay for my teenage children?’
My teenage children work and pay some of their own bills, but not all of them. We split the cost of the car (we pay insurance, they pay rego). Yesterday, I paid $200 for a dentist visit.
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But should working teens take up their own costs? How much is reasonable? Or should parents pay until they leave home?
Advice: ‘There isn’t a one-size-fits-all answer’
Teaching teenagers financial responsibility is so important. Soon enough they will be all grown up and looking to move out of home.
We have the biggest influence on our children while they live with us and teaching them about money management and how to manage their financial responsibilities is among the most important lessons we can pass on.
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For teenagers who are working, it is reasonable for them to pay some of their own living costs in addition to contributing to the running of the household. They need understand as soon as they are working regularly that the money they earn isn’t all just for fun.
Katrina Samios, CEO of Financial Basics Foundation agrees and praises this parent for what they have established so far.
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“Firstly, it’s fantastic that you and your child have already established an arrangement for splitting the cost of the car,” she says.
“This demonstrates a shared responsibility and can be a valuable lesson in financial management.
“Encouraging your child to contribute towards their own expenses, such as paying for registration, teaches them the importance of budgeting and taking ownership of their financial commitments.”
When it comes to determining which bills parents should pay, she says there isn’t a one-size-fits-all answer.
“Generally, a good idea is to progressively encourage your working teens to take on more of their own costs,” she suggests.
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“Don’t expect them to cover everything right away, but rather help them become more financially independent over time. The key is to strike a balance between teaching them financial skills and ensuring they have the necessary resources to succeed.”
For working teens, Samios suggests splitting personal costs such as phones, entertainment and clothing as well as transport costs.
”It’s reasonable to expect young adults to contribute to health-related expenses. However, you can offer to cover or share these costs if they are significant, or if your child is still studying and not working full time,” she says
Unexpected expenses are another matter and can prove challenging for young adults. For these, Samios says it is reasonable to pay these expenses while teaching children the importance of saving for such things.
“Teaching them about budgeting, saving, and investing will provide a strong foundation for their future.’
The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.