Grandchildren and their money

A 16 year old is but a child and the young man will be rash and foolish with his first taste of significant earnings. He will also resent being told what to do and might behave worse to get revenge and rile his advisors.

Nevertheless, it is an abdication of parental duty to let the young fellow get the idea that his earnings are merely pocket money. As soon as my children were earning I took an amount of 'keep' from them for two reasons: firstly, to teach them about bills and financial planning and secondly to save it in secret for them for their first house deposits.

Perhaps someone the boy respects could give him a few hints about budgeting. The 50/30/20 rule is a must. Of one's earnings, 50% should go on living expenses (perhaps paid to parents for keep), 20% to savings and 30% to splurge on pleasures.

If he earns £1000 a month it is easy to split up and he can have £300 a month to spend as he desires.

Those who favour liberal parenting and consequence-free indulgence might consider their own finances. Do they have £1000 a month left after all their obligations to waste on whatever they like? Most people decidedly do not so why should a child have this as pocket money and be let off paying their due?

I would consider it an injury done to the young man to start him off with feckless and indulgent financial habits which will only bring him misery over his lifetime.

Well done Grandson, the apprenticeship is a wonderful opportunity, and how lovely having so much "pocket money", he will after a while well,when the novelty wears off, spend and save wisely I am sure, he seems a sensible young man entering the RAF, what a future he will have, good luck to him.

He's only just joined - let him get used to his new life and all it's implications. It's a big transition coming out of basic training and going into trade training. He'll probably be too busy to turn round. The good thing about RAF stations is that they are usually bang in the middle of nowhere so, without his own transport, he isn't not going to be running off into town every five minutes living the high life and splurging his wages. He'll be fine, he will learn, and he will have a great career, the same as my lad did, with qualifications and a good pension at the end of it. Please stop worrying about him.

As he is 16 he will not run up huge debts as he can't have a credit card until 18 and his debit card will be a baic card meaning he cant't have an overdraft. Let him enjoy it but suggest he puts a bit aside for car of his dreams!

I hope foxiewas joking too
My daughters had their pocket money-half the child benefit each-paid into a bank account when they went to secondary school and we agreed what we would pay for and what they would in future .It taught them money management very young and both are really good with money.
I do think 16 is a bit late and a casual discussion about putting money into pension (!),savings etc might be opportune
But splurging a fifth of your first pay on something you really want us hardly spendthrift

He is sixteen we can all rember that first rush of independence our first wage packet gave us I can think of a lot of worse things he could of spent his money on I'm sure given time he will spend his money wisely.

He sounds like any normal 16 year old with a bit of money in his pocket. £100 goes nowhere these days - a decent bottle of perfume is £75! Foxie i do hope you are joking!!!

Well done to him
Of course he is thrilled to have some money of his own to spend and can afford to spend some a bit frivolously because he now has a steady income. He'll learn (or maybe not!)

Mine had some inheritance from both DGM and spent it on travelling as soon as they got their mitts on it at 18. I made some vague suggestions about it seeing them through their first year at university but it was gone on a gap year.
Part of the learning curve.

I admire your grandson for his achievements so far at this very young age and I also take my hat off to his Mum and Dad and grandparents for wanting the best for him.

Stansgran gives great advice here - a simple transfer to a savings account would be brilliant or maybe a small stakeholder pension pot in addition to anything the RAF may have for the future.

I wish him well, he's made a brilliant start to investing in his own future. All the best!

Better than drink and drugs don't you think? Suggest he opens a savings isa via parents to aim for his own car if you must.

OMG lad of 16 has fun, hold the front page.

He is clearly sensible to have got himself an apprenticeship, leave him alone to do his growing up now, part of which is having choices about the stuff he wants to buy and how to spend his own money.

With the RAF, he will probably learn to drive and travel and live independently of home so he will have to have, a little 'risk' in his life, wasting a bit of money on fun won't harm him.

Thanks for your observations. I'll pass them on to his parents. I would like to point out, though, that his £1000 per month will be pocket money! Over time that is a substantial amount - in their view anyway. The RAF teach him to drive, lucky boy.

i don't agree foxie - but i agree with all the other posters. he's 16 and this is his first pay packet - can't you remember what you felt like when you brought your first pay packet home? i know i felt like i could buy absolutely everything i wanted. came back down to earth quite quickly though when i realised i needed money for bus fare, lunches and to pay for my keep [yes i know this young man has his keep paid for].
no - it's HIS money and it's up to HIM to do what he wants with it. he'll soon find out that money doesn't buy everything but he'll have fun trying.
leave the poor boy alone to make his own mistakes and come to his rescue [although it might go against the grain] if he comes a cropper - he'll soon learn how to budget [factoring in how to pay you back].
good luck to him and well done on getting what he wants.

If you can't be frivolous with money at that age when can you? He will probably soon see something big that he wants to save for but will probably not want to save just for the sake of having savings. I started working (and saving) at 17 because I was in Canada and wanted enough to be able to come back to England. I wish I had been able to just spend and enjoy my money.
I agree with the comments about a financial adviser. If they are really independent they will not be cheap and I can't see how it would be money well spent at that stage of his life so not a good first lesson.

Just wanted to add a word of warning. It is illegal to give cheques for money you do not have to cover it. Also the RAF will charge him if he is caught doing that. When I say charge I do not mean ask for money, I mean he will be on the carpet in front of his CO. They do not tolerate people running up debts so tell him that because I know, having worked for them for 21 years in the civil service. He would be in a lot of trouble.

These days we seem to regard 16 year old son as children. I left school at 15, started work and was treated as an adult. I had to pay my fares into London, buy my lunches etc and pay rent to my parents (which they put into a savings account but I didn't know it then). The wages I received were a lot of money in those days and whatever l had left was mine to spend

To put it bluntly he's a young fool and wants his head looking at. Talk to his commanding officer and tell them about your concerns and I'm sure that they have personnel able to advise and deal with this kind of irresponsible behavior. Getting an apprenticeship with the RAF is like winning the lottery and they won't want to see the opportunity wasted on anyone unlikely to complete the course.

Oh come on! First pay packet and he cannot spend it on what he wants? Be fair. Let him splurge for once in his life. He will soon want to open a bank account for himself. He needs to 'cut the ties' and be his own man. Encourage him to put his money in the bank, in fact I think it will be paid in to a bank by the RAF so he will have to have an account. He will be given advice by them and he is more likely to take it than from his parents. When he wants things such as a car, a bike, whatever, do not be tempted to fork out and tell him now he is earning he will have to save the money himself. Open an account for him yourself in secret which is what I did for my GSons. When they are 18 they have a nice surprise coming. Well done indeed to him for getting an apprenticeship which will set him up for life.

£500 IS NOT a large amount (comparitively or not) a large amount of money. If he as in a 'normal' job, even on minimum wage for his age he would be bringing in double that a monyh. No financial advisor would waste their time, or his money, giving him advice for such a paltry amount.

He has done well so far and should be allowed to make his own choices...and, perhaps, mistakes. He will learn, if he overspends initially.
Good luck to him!

If he gets in a mess because of reckless spending, and most young people do in the first couple of years of managing their own money, then I recommend his parents bail him out, but insist he repays the money within an agreed and tightly monitored repayment plan. Once he realises that bad money management has consequences and that his parents are not going to give him a free 'Get out of Gaol' card, he will wise up and manage better.

It worked well with my children who are very conservative money managers, so I would expect it to work with other youngsters.

If he has no other expenses as clothing, board and lodging is provided what do they want him do do with the money? At 16 having money to burn is hard to resist. If they want him to save then they need to provide an incentive..certainly current interest rates don't! If the family can afford to why not offer to match some of his first year savings. ie if he saves £300 a month = £3,600 say you (the family) will round it up to £4000 or whatever you can afford! Or promise to fund a course of driving lessons if he has saved enough for a car! He has to learn for himself the folly of being prodigal and the benefits of some level of frugality!

I was reminded of my Dad saying 'you can't put an old head on young shoulders', give him time and try not to worry.

A friend once said to me teenagers have to learn how to waste money before they learn to use it wisely or save it.

did you regulate how his Mum/Dad spent their wages? Or did your parents get a financial advisor for you when you got a job? £1000 isn't a massive amount of money these days ...honest.Its a couple of hundred pounds a week and if he has a night out or two it will soon go,My son tells me its impossible to go for a meal and the cinema on less than £80 nowadays especially if he's treating a girlfriend.So just give him the chance to enjoy being young,with age comes responsibility and that will happen all too soon