Learning to Manage Money: A Real Life Lesson for Tweens and Teens
As children get older, the list of things they want gets longer. Inevitably, at the same time, the size of things gets smaller and price tags increase significantly. Children rarely appreciate how much these things cost or where the money comes from to buy them. Of course not, they’re not in a position of having to maintain a budget.
This is what we are currently experiencing with Bean, now ten. He is really into Minecraft and wants all kinds of things to go with it. He sees games he wants for the XBox, different games consoles; all the usual things at his age. And we can’t supply all of those things, and neither do we want to. Time for a life lesson.
Bean gets pocket money from us each month, in exchange for doing a (very) few chores. A few months ago we came across a debit card specifically designed for children aged 8+. It’s a pre-paid card, not linked to a bank account, and it’s impossible to spend more than is loaded on to it. We got one for Bean.
Osper is a brilliant idea. As the parent, you order the card and activate it when it arrives. You manage it via a free app on your phone or tablet. You choose how much will be paid onto the card – we have it set to pay £10 on the first of each month. You also choose whether you want to allow your child to use the card online. You get to see the balance and all the transactions that have taken place. You can also change the amount you send each money, so if Bean didn’t do his chores, we could deduct an appropriate amount from next month’s allowance.
Bean manages his money via his own app. It shows him his balance and what he has spent. He has a PIN, so he can use the card in shops (the card itself is a Mastercard debit card) and he can use it to spend online too – lots of the things he wants to buy come from online.
It’s been interesting. The first couple of months, the money was spent within an hour of arriving on his card, and Bean, having not taken the time to prioritise his spending, ran out of money before he had got all the things he wanted. It took a little while, but he is now beginning to realise that there may well be lots of things he wants, but his money will only go so far. He’s taking time to work out what he can actually buy with his allowance, and making decisions about whether he thinks item x is worth spending his precious money on. Things he would have bought in a heartbeat a couple of months ago are now dismissed as expensive, or not worth the price tag, to him at least. It’s had the added benefit that things he has bought using his card have much more value to him – he looks after them because he appreciates just how much they have cost.
And he now has a much better understanding of the value of money, which shows itself in all areas of life. He gets that we also have to work to a budget and prioritise our spending. He understands (even if he doesn’t like it!) that boring things like heating bills and mortgage payments have to come before days at theme parks or going out for pizza.
It’s making him think more about money in a realistic way, but not in a boring “this is how money works” kind of way; he’s getting to spend his own money and be responsible for how it’s spent. A feature of Osper Learn is an enforced saving option – where you can insist that x amount of each month’s allowance is saved rather than spent. and I think that will add another interesting dimension to the lesson in money management. It will also hopefully help children form positive habits for later life – the ability to put aside some money each month is one that many adults don’t have, but something we could all do with. Having a “rainy day” fund to deal with unexpected expenses helps keep us out of expensive debt.
An Osper card is free for the young person who has it. The parent is charged £1 a month to administrate it, although there is a 3 month free trial available. Family and friends can also add funds to it (if you upgrade to Osper Learn), perhaps for a birthday or Christmas present. There’s also a Facebook group that parents can join called “Osper Insiders”. This group asks you for feedback on the way the card operates, on future plans and gives the children the chance to take part in challenges which can earn them credit on their card or goodies – Bean recently had a bright orange (and good quality) Osper t-shirt arrive in the post for him, which he loves. He also received an Osper card wallet to keep his card in.
If you’d like to know more about Osper, you can find answers to all your questions on the Osper website. If you use think link, Osper will add £5 credit to your child’s card when you activate it (and Bean will receive some credit too). If you want to know more about our experience with the card, feel free to ask questions in the comments section below.
Info: I have not been asked to write this post and am not receiving any compensation for doing so. Bean will receive credit for each new activation using his code and each new activation using his code will receive £5 free credit on their card too.