Three money lessons every teenager should know

Numeracy is taught at school in the form of maths and science and number-based subjects, such as economics and accounting, but financial literacy — understanding how to manage and use money — is barely touched on. Instead, most children learn about money through experience and examples they receive from parents and peers. Not surprisingly, kids can end up with vastly different ideas about how to handle money.

Tammy Barton, founder of MyBudget and one of Australia’s leading money experts, says that she’d like to see all high school-aged children receive basic lessons about money management. She says, “In a perfect world, children would be taught about financial fitness the same way we teach them about staying physically active and making good nutritional choices.”

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So, what can you do to prepare your teenage children for the financial challenges of life? We asked Ms Barton to share her top three money tips for school leavers who are about to encounter the real world.


“It would be a huge benefit if every kid was taught how credit cards work before they turn 18 and start getting credit card offers in the mail,” advises Ms Barton.

Credit cards are one of the most common causes of financial stress in Australia and young people are especially vulnerable to the “buy now pay later” attitude they encourage. Most people understand the concept that a credit card is a loan and that the money needs to be paid back, but many do not properly appreciate that making only the minimum monthly repayment can lock them into decades of debt and thousands of dollars in interest charges.

Ms Barton continues, “Imagine the benefits if we could graduate future generations from high school whose first lessons about using credit came from educators instead of retailers and lenders.” She continues, “Teach your teenagers about the value of using cash over plastic and the benefit of saving for the things they want.”


Signing up for a mobile telephone plan is often one of the first credit contracts young people will enter into and many will not properly understand that they are committing to a fixed term agreement and all of its potential pitfalls. For example, many will decline handset insurance because they do not see the value of it until they lose their phone and discover that they still have to pay the contract plus buy a replacement device.

“Young people are usually unaware that telephone companies are among some of the quickest creditors to put a black mark on your credit file for paying bills late or defaulting,” explains Ms Barton. “We need to teach kids and young adults how important it is to let their creditors know if they can’t make their payment on time or the contract has become unaffordable.”


“Whenever I’m talking to young people about money, I remind them that financial freedom doesn’t rely on having a big income. You can be financially fit on nearly any income level when you budget to live within your means and save to get ahead,” says Ms Barton.

Budgeting and saving are considered foundations of good money management and Ms Barton recommends teaching teenagers through practical examples. “We need to show kids that budgeting and saving isn’t boring. It’s an exciting part of life’s journey towards independence, something that teenagers naturally want,” she explains.

Ms Barton finishes, “If you’re a parent, it can be as simple as getting your kids involved in household budgeting, encouraging them to save up their pocket money or giving them jobs around the house to earn spending money in the holidays.”

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What will you do with your savings? Reduce your mortgage? Invest in shares? Take a holiday? Or simply enjoy the feeling of satisfaction that comes with having savings to fall back on.

Personal budgeting is the only way to truly gain control of your money and your financial future.

The benefits of personal budgeting:

  • Personal budgeting is the only way to gain a thorough understanding of your financial situation.
  • Personal budgeting ensures that you always live within your means, and provides a safety net for inevitable changes in life or when things go wrong.
  • Personal budgeting is the key to accumulating savings and achieving your financial goals.
  • Personal budgeting is one of the most effective methods for paying down debts and avoiding ongoing debt in the future.

Thousands of people come to MyBudget every year seeking our support and advice about managing their money. We can provide structure, support and guidance to help you get on track.

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