2 You and your money now
How does your money reach you? Do you get it in cash or does it arrive in some other form? Do you spend time planning what to do with it? Do you stash it somewhere like a savings account or a bank? Or do you go ahead and spend the lot when it arrives? What do you like to spend it on? What do you save up to buy? Do you pay for your own phone? What about your clothes? Do you shop around before you buy, or do you spend on impulse?
The point of this first activity is to make a record of where you and your money are right now. Curb your impulse to look at the feedback before you’ve answered!
Activity 1 What’s your situation?
Have a go at answering the following questions. If you like, add your answers to the boxes in the table.
| Question | Your answer |
|---|---|
| Where does the money that you spend come from? | |
| Do you have a bank account? | |
| How do you access your money? Does it come to you in cash? Or do you take it out of an account, like a bank or savings account? Or do you get it via an app like GoHenry? | |
| Do you have a part-time job? Do you work in school or college holidays? | |
| Do you have a budget – a way to record your income and manage your spending? How does this work? | |
| How far ahead do you plan your finances – a week? a month? a year? not at all? | |
| If you have a bank account how often do you check that the balance is correct? If you don’t yet have an account, how do you keep an eye on what you’ve got? | |
| Do you have a savings account and do you know how interest on the account is calculated? | |
| If you pay for your phone, how far do you shop around to get the best deal? | |
| Who, or what, influences your financial decisions – the choices you make – especially when you’re spending money on phones, computer technology and clothes? |
Have a look at the feedback to those questions. Everyone’s situation is going to be different in some way, but here we’re interested in your particular financial set-up.
Feedback
| Question | Feedback |
|---|---|
| Where does the money that you spend come from? | The money you spend might be given to you – as pocket money (or an ‘allowance’) – or you might earn it. Even if your money is given to you, it might come with expectations or requirements from your parents or guardians – for example you might have to carry out certain household chores. (We’ll often talk of parents in the course but we use ‘parents’ while acknowledging that there are many differences between households and that those looking after you might be other members of your family (grandparents, siblings) or other guardians.) So in this sense your ‘pocket money’ or ‘allowance’ is money that is ‘earned’ and not just given freely. |
| Do you have a bank account? | Your own bank account is a key starting point to managing your finances. |
| How do you access your money? Does it come to you in cash? Or do you take it out of an account, like a bank or savings account? Or do you get it via an app like GoHenry? | Increasingly pocket money is credited to accounts or given via an app. Parents can use an app to control and monitor how and where pocket money is spent. |
| Do you have a part-time job? Do you work in school or college holidays? | Many, but certainly not all, the 16–18-year-olds still at school in the UK have a part-time job. |
| Do you have a budget – a way to record your income and manage your spending? How does this work? | If you keep a record of your income – whether pocket money or other earnings – and a plan of how you intend to spend or save it, this is a good start. |
| How far ahead do you plan your finances – a week? a month? a year? not at all? | It’s a good idea to be clear on your month-to-month financial position and to start to think about how your financial situation will change after you leave school or college. |
| If you have a bank account how often do you check that the balance is correct? If you don’t yet have an account, how do you keep an eye on what you’ve got? | Checking your bank account regularly is important. This not only confirms how much money you have but acts as a check against possible fraudulent activity affecting your account. Even if you don’t have a bank account, regularly checking how much money you have available is sensible. |
| Do you have a savings account and do you know how interest on the account is calculated? | If you have a savings account you should check out the interest you’re paid. Changes to the rate of interest paid do occur fairly regularly. Providers of savings accounts – the post office, building societies, banks – need to notify you of changes, but it’s easy to ignore their letters. |
| If you pay for your phone, how far do you shop around to get the best deal? | This is a good way to keep the cost of your phone down. It’s so easy to do, using comparison websites. |
| Who, or what, influences your financial decisions – the choices you make – especially when you’re spending money on phones, computer technology and clothes? | Financial influences could be your family, your peer group, social and marketing pressures, and role models. Peer-group pressure is especially influential and it can be harmful to your finances, as you’ll learn later in the course. |