At what age should I start letting my child be responsible for paying bills such as topping up his mobile phone or pre-paid card? And do you think this is a good idea?
Sheila Dickinson answers: Learning to be responsible for expenditure is an important step in a child’s financial literary education. In general, children aged about 16 should have a good understanding of the concepts of spending and budgeting.
Taking your son as an example, it would be good to start discussing financial responsibility with him, and how his “income” (this can be pocket money or a salary from a part-time job) are allocated for expenditure and savings. Through constructive conversations and daily observations, you will begin to see if your son is ready to take care of part of his own expenditure or not. Depending on the parents’ preference and the child’s age and stage of development, the degree in which the child is responsible for his or her own expenses can also vary.
Regular allowance
It would be a good idea to give your son a regular allowance, if you have not yet done so. This is the most hands-on method of teaching him how to spend and save. The amount of allowance you give him should be able to meet his needs, but not necessarily fulfil everything he wants.
You can then encourage him to start managing his money by letting him to take care of part of his daily expenses, such as topping up his mobile phone or paying his own weekend entertainment expenses. He may have to learn to work out a budget, determine how much he needs for daily expenses, how much to save and how to allocate his money accordingly. If he spends more than his budget, he should be responsible for that.
Paying bills on time
Remind your son to pay his bills before the due date. Paying on time is a good habit that should be cultivated. Ask him to keep records of his money. This is a good way for him to see how much he has spent over time, and how much he has saved. He should also be encouraged to keep receipts from all purchases and bills paid, and keep notes on what he does with his money.
Through budgeting, saving and spending, your son will learn about decision-making, responsibility and priorities – important lessons that will be needed throughout life.
Don’t forget that your guidance is also an integral part of his learning process in becoming a financially responsible adult.
This article was contributed by Sheila Dickinson. Sheila is the Senior Vice President and a SFC Licensed Representative (SFC CE no: ANS128) with ipac financial planning Hong Kong limited. Sheila is also a Technical Representative with the Professional Insurance Brokers Association, Registration Number PIBA-0428-007924. Sheila can be contacted at financial.planning@ipac.com.hk.
ipac is licensed with the Securities and Futures Commission of Hong Kong, CE No. AAN641. ipac is a member of Professional Insurance Brokers Association, member number 0428.
In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any person. Before making an investment decision, you should speak to a financial planner to consider whether this information is appropriate to your needs, objectives and circumstances.
2 Comments
Thank you very much for this article. When I was growing up, we were not expected to pay any bills or be responsible financially in any way. This had an effect when I got to university, and I suddenly had to learn to manage my finances. This is an excellent article that many parents can benefit from, including myself!
This article is very inspiring to me. I agree with you that it’s all about priorities and responsibility. We need to learn about it before growing up to be a responsible and successful person in society. Thanks for sharing.