Marcel can’t resist style: he loves buying clothes – sometimes too much. But he doesn’t want to be short of cash at the end of the month. Many youngsters get hooked on shopping; some even go into debt. About 80 percent of adults with debts rack them up before their 25th birthday. How can this vicious cycle be broken?
Managers of vocational trainees believe they need financial education. That’s why the UBS branch in Vevey has developed financial seminars for apprentices. “We show them how to draw up a budget,” says Branch Manager Henri-Louis Moret.
Haircut, phone, clothes
A Jugendlohn, or youth wage, is another idea. It works like this: young people get a fixed sum each month from their parents, in line with the family’s standard of living and budget, which they have to manage themselves. “We recommend introducing it when a child turns 12, when expectations and the desire to shop are still relatively low,” explains Andrea Fuchs, President of the Jugendlohn association. “Youngsters can use it to pay for clothes, haircuts, bike repairs, and mobile phones – things their parents would otherwise cover.”
The idea is to make youngsters aware of the difference between what they want and what they need. They learn to plan ahead and set priorities. The Lucerne School of Social Work has researched this concept. Its conclusion: the youth wage helps to prevent debt.
The Müller-Möhl Foundation also recommends a youth wage. “Parents hold the key to how young people handle money,” says foundation President Carolina Müller-Möhl. “Youngsters have to learn to make their own purchasing decisions at an early stage. Parents should take a backseat.”
Easing the family budget
For most families, the youth wage makes life easier. “There’s no more arguing over a new phone or designer clothes,” explains Andrea Fuchs. It also places less of a strain on the family budget than the “open hand” approach. After all, parents are giving their teenagers not just money, but also responsibility.
Letting go is hard
“At first, I found it difficult to let go and trust my son to spend the money wisely,” Beatrice Rey tells us. She introduced a youth wage when her son was 15.
“Marcel wasn’t very good with money. That’s why it was important to me that he learn about it before he got his first apprentice paycheck.” It took a lot of effort at the start, but the relief afterwards was huge: “I get a lot less irritated, and I no longer go shopping with him.”
It can be difficult for parents to stay strong and refuse to help out with money when youngsters mismanage their budget. But neither Marcel nor his mother would turn back the clock. “He compares prices now and thinks more about his spending,” says Beatrice. Marcel is also positive: “I’m happy that I can make my own decisions about money.”
Pocket money – how much should you give?
- There is no law saying you should give your kids pocket money, but it makes sense to do so.
- Pay the pocket money regularly, on a set day, and don’t use it as a disciplinary measure.
- Children should be free to spend their pocket money as they like. However, be clear about what you expect the money to cover and how long it has to last.
- Talk about money. Kids should be aware of how much life costs.
- As to the amount of pocket money, experts recommend 25 to 50 francs a month for 10- to 14-year-olds and an amount of 50 to 80 francs a month from age 15 upward.