Disability Coordination Office ACT - Negotiating the Maze

Teenagers face many challenges when it comes to money management.  During these years, they are defining their identity, customs, preferences, and behaviour patterns. At the same time teenagers are experiencing the full influence of peer pressure to conform to the group in combination with consumer advertising campaigns specifically targeted to appeal to their age group. Individuals may react to these pressures in different ways, and it is important for teenagers to develop money management skills to cope with these pressures.

Young people with an intellectual disability need the same opportunities to learn money management skills as any other teenager. They need opportunities to experiment, make age appropriate decisions that have real life consequences and learn from their mistakes.

No one is expected to be able to go from having no responsibility for their financial affairs to having full responsibility in one simple step.  Money management is a skill that they will acquire over many years. Support your teenager to build these skills by gradually increasing the type and level of money management responsibilities they take on. Give them real-life opportunities to learn these skills.

• Discuss money management with your teenager and make an age-appropriate plan about when they will take over responsibility for different financial aspects of their daily living needs.
• Include your teenager in conversations about the family budget and bills.
• Show your teenager what bills look like and how you plan to pay them. Reconciling the bank statement can give a picture of both monthly and seasonal expenses. If you keep family account records, let your teenager track the expenditures so they can see firsthand how much it costs to live.
• Get your teenager into the saving habit by helping them identify savings goals and maintaining a savings account.
• Involve your teenager in making financial decisions. If you are planning to buy something for the home (appliances, white goods, home entertainment products etc.) involve them in the research, budget and purchase process.
• Teach your teenager budgeting by involving them in the grocery shopping - a responsibility that needs to be done on a regular basis; represents a large portion of a family's monthly expenses; and requires practical money management skills. Have them contribute to some of the meal planning, at first with your help and supervision and then later on their own.
• If you have a car that they use on a regular basis, consider having your teenager assume some level of responsibility for petrol, registration, insurance, maintenance and other costs.
• Provide opportunities for teenagers to learn comparison shopping, unit pricing, and how to find and use shopping information such as consumer product tests and reviews.

Disability Support Pension

Your teenager may be eligible for the Disability Support Pension (DSP) when they turn 16.

To a teenager, the DSP may seem like a large amount of money. It is not uncommon for teenagers who are eligible for the DSP to drop out of school once they turn 16 in the belief that they will be able to maintain a particular lifestyle on just the DSP payment.

Prior to the age of 16, identify practical opportunities to increase your teenager's awareness about the financial realities of daily living expenses, including the costs of maintaining a home and family so that they can make informed decisions about their future.

Functional Skills Checklist

Download checklist in a worksheet format:

 Financial Independence / Money Management Worksheet (462 Kb) MS Word format

 Financial Independence / Money Management (266 Kb) PDF format

The checklist worksheet includes the following goals:

Goals

• Asks for help with finances (information and advice) from appropriate people and agencies

Personal Budget

• Manages personal budget (put together and stay within budget)
• Determines anticipated income
• Identifies living expenses
• Differentiates between needs and wants
• Identifies fixed and variable expenses
• Sets priorities
• Identifies ways to reduce expenses
• Plans for unexpected events that may affect income or expenditure
• Researches costs
• Develops (and modifies over time) a budget for daily living
• Analyses personal spending habits
• Prepares a budget for a particular scenarios (school formal, car purchase, holiday, a new computer, mobile phone, or big ticket item purchase etc.)
• Uses money management software / spreadsheets

Making informed decisions about purchases

• Makes price comparisons
  • Compares the price of the same product in different stores or catalogues
  • Compares cost of purchasing 2 small cans of product versus 1 large can
  • Compares price and quality of brand names to generic/no-name products
  • Identifies financial savings/expenses associated with purchasing in bulk (single fare bus ticket vs. daily, weekly, monthly multiple use tickets)
  • Compares costs associated with preparing a home-made/packed lunch vs. bought lunch

Purchasing items

• Exchanges money (cash, EFTPOS, credit cards)
• Estimates and receives change
• Compiles grocery/shopping lists
• Does the grocery shopping (additional information in Home Life Skills section)
• Pays board, rent or mortgage
• Pays bills
• Identifies and contributes/pays utility charges (gas, electricity, water, rates, phone, internet)
• Identifies ways to reduce energy use

Banking Skills

• Uses a debit card
• Uses a credit card
• Uses an ATM card and machine
  • Remembers PIN number
  • Withdraws money
  • Deposits money
  • Can get information about bank balance
• Uses online banking:
  • Remembers password/PIN number
  • Pay bills online (BPay)
  • Locates information about bank balance
  • Transfers money between accounts
• Understands the costs and fees associated with a bank account
• Keeps cash secure
• Knows what to do if you forget you PIN number or password
• Knows what to do if your ATM Card or credit card is lost or stolen

Banking Etiquette

• Understands and uses the process to see a bank teller
  • Waits in line patiently for a bank teller
  • Gets a ticket and waits patiently to be called
• Identifies the appropriate amount of time to converse with a bank teller

Bank and other Financial Statements

• Reads and interprets statements
• Checks credit card statements against payments made
• Understands the difference between credit and debt
• Maintains accurate and well-organised financial records
• Understands the difference between take-home wages and gross wages (tax, superannuation and other direct deductions)
• Completes and files yearly tax return

Legal Obligations

• Understanding and meeting legal obligations attached to financial transactions including:
  • Contracts
  • Refund and Exchange policies
  • Obligation free quotes
  • Instalment payments and lay-bys
  • Interest and interest-free periods
  • Warranties
  • Consumer rights
  • Insurance
  • Bank fees
  • Credit card payments (including fees and interest)
  • Mobile Phone contracts
  • Late fees (including returning DVDs late)
  • Lending money
  • Borrowing money (formal and informal loans)
  • Making repayments
  • Calculating interest
  • Saving money (long-term and short-term plans)

Scams ^[1]

Financial Scams

• Identifies and responds appropriately to common financial scams including:
  • Lottery Scams - where you "win" even though you never bought a ticket
  • Cold calling investment schemes where a call or email comes out of the blue offering you an investment opportunity
  • Phishing emails from criminals pretending to be your financial institution and trying to get your personal details
  • Nigerian 419 scams where you are promised huge rewards if you help someone transfer money out of their country by paying fees or giving them your bank account details.
  • Spam (junk mail) scams that usually offer free goods or ‘prizes', very cheap products or promises of wealth.
  • Work from home scams - employment opportunities that promise huge incomes with little work - usually by asking you to transfer money for someone else or recruit new victims.
  • Guaranteed employment / income scams where scammers "guarantee" you a job or certain level of income, tricking you into paying an up-front fee for a "business plan" or materials.
  • Up-front payment scams where you are asked to send money upfront for a product or ‘reward'. You will end up with something much less than you expected, or nothing at all.
  • 'Free' offers on the internet where you are offered ‘free' website access, downloads, holidays, shares or product trials - but you have to supply your credit card or other personal details.

Mobile Phone Scams

• Identifies and responds appropriately to mobile phone scams including:
  • Ring tone scams - misleading offers for ‘free' or cheap ring tones that end up being a subscription or premium rate service.
  • Missed calls & text messages from unknown numbers - Missed calls that can lead to premium rate charges. Mysterious text messages that can cost a lot of money if your reply to them.
  • SMS competition and trivia scams where you are encouraged to enter a competition or trivia contest over SMS for a great prize - but misled about your chances or how much it will cost to take part.

Allowance

Negotiates and manages an allowance (fortnightly, monthly etc.)

Negotiating Allowances - suggestions for parents

• Be sure to take the time to sit down with your teenager to identify, cost and negotiate what expenses and items will (and won't) be covered by the allowance. Items may include:
  • Entertainment money (going out, movies, DVDs, concerts, music, books, magazines, games, pay TV subscriptions, club fees)
  • Fitness and Healthcare costs (medication, medical appointments, insurance, gym membership, sporting equipment, recreation fees)
  • Clothing and shoes
  • Personal care products (hair cuts, hair products, personal hygiene products, makeup, jewellery)
  • Mobile Phone (mobile phone (a pre-paid or capped service can limit the possibility of getting into difficulty with mobile phone debt)
  • Communication (mobile phones, long distance calls, internet expenses)
  • Electronics (cameras, phones, MP3 players, computer hardware, software and consumables)
  • Transportation (bike, bus, taxi, car costs, petrol, car insurance, bike/car maintenance)
  • Holidays/ Vacations/ Outings
  • Further education and learning (course fees, equipment, textbooks, materials)
  • Pets
  • Gifts (birthdays, special occasions)
  • Charitable donations
  • Savings
• Be consistent and reliable about paying allowances on a set day
• Pay what you can afford, regardless of what other parents or your teenager might advise
• If your teenager gets a certain amount of money to purchase lunch every day or for public transportation, consider adding this to their allowance and have them take the responsibility of managing this expense.
• Consider direct-debiting the allowance into your teenager's bank account instead of using cash. This increases opportunities for your teenager to practice regular banking skills including using an ATM and online banking. It also gives your teen an opportunity to learn that electronic money is more than a set of numbers.
• While parents can provide advice, your teenager should decide how to spend his/her allowance. Let your teenager learn from their mistakes and accept responsibility for their choices. Try not to supplement your teenager's allowance or give payment in advance when they run out of funds. Managing an allowance is about providing real-life opportunities to practice financial decision making.
• Help your teenager establish attainable goals using a personal budget that includes a spending and saving plan
• Consider allocating a separate clothing allowance that is paid quarterly or twice a year, supporting planning skills that take longer term budgeting into consideration as well as increasing decision making skills.
• Include a plan for expenses associated with Year 10 and Year 12 Formal and graduations
• If you elect to link the payment of an allowance to completing certain work or activities, be sure to identify and negotiate what needs to be done and how often so there is no confusion. It is not usually recommended that allowances be tied to basic household chores that you would expect your teenager to do because they are part of the family, not because they are paid. Completing such chores teaches teenagers family responsibility. It may also increase their self-esteem and allows them to see themselves (and be seen by others) as active and valuable participants in others' lives.
• Give your teenager positive feedback for successfully managing their allowance. You might even want to consider giving them a little bonus for their efforts.

Managing Financial Risks - One Family's Story

Allan is 21 and has been working for some time. He lives at home but likes to go out by himself and has his own bank account and ATM card to withdraw money when he wants. Recently he made some new friends and they persuaded Allan to fill their car with petrol and to buy food for them with his ATM card. His mum and dad found out when Allan complained that he had no money left in his account for that month.

They were upset for him and used the experience as a way to talk about the difference between acquaintances and good friends. But they didn't have to worry about the money as they had worked out a protection system with Allan when he first started working to safeguard against situations like this. They opened two accounts in Allan's name and only put a limited amount of money on the ATM account to safeguard him against losing all his savings. ^[2]

[1] The information in the scam section is sourced from the ScamWatch website www.scamwatch.gov.au.
This web site was developed by the Australian Competition & Consumer Commission (ACCC) to provide information to consumers and small business about how to recognise, avoid and report scams. We have included some of the more common scams that are making the rounds at the moment.

As new scams and variations on old scams crop up all the time, please visit the ScamWatch website to stay up to date with the latest information and to find more information about the scams that may target you.

[2]  Western Australia Disability Services Commission 2004, Transitions: Moving forward with your teenage child, accessed 19/11/2007, www.kalparrin.org.au/transitions/index.html.