The salary level of young people is determined by mobile phones, shopping and going out: What do young people spend their money on?

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The consumer world beckons with countless temptations and needs are awakening. If you want to be able to afford it, you have to do the math. Otherwise the money will run out faster than planned. Therefore, it is important to develop awareness about your personal financial options.

How much does an energy drink cost? How much money will I have left if I go to the cinema twice? Is the burger still there from before? Should I buy great sneakers or save up for something else? Young people ask themselves these questions when they have to pay their own pocket money.

“If young people only receive pocket money, it is all about free time and desires. They often have no idea how much life costs,” says Andrea Fuchs, President of the Youth Wages Association. That’s why it’s important for parents to talk to their children about money from an early age.

Where does the money go?

How much money is needed for a carefree teenage life depends on several factors. On the one hand, of course, the family also has financial means. On the other hand, it also depends on what needs to be paid with pocket money.

There is surprisingly little data on how young people spend their money. A 2021 study in Germany provides insight. Accordingly, existing pocket money is primarily used to finance food and beverage, clothing, games and mobile phones.

This was also confirmed by a survey conducted by the University of Vienna in 2018: Stereotypical role models were also identified: spending on fashion and beauty is three times higher for girls than for boys. They are also investing much more in video games and technical devices.

Savings start early

A pocket money survey conducted in Switzerland in 2017 with young people up to the age of 14 does not show where the money goes. However, he explained that 13-year-olds have an average of around 1,400 francs in their savings accounts. This is due, on the one hand, to the money given as gifts, and, on the other hand, to the habit of saving acquired from an early age. If they have specific savings goals, it’s usually a smartphone, computer, or vehicle.

According to German youth researcher Simon Schnetzer, young adults are already heavily interested in finance and investment options. This is also stated in the “Young Switzerland 2023 Survey” by marketing agency Jim & Jim, on which Schnetzer works. But when you not only save but also invest, you must take into account the risks of price fluctuation.

Youth pension instead of pocket money

As pocket money research shows, children in Switzerland are generally given a regular pocket money from the age of six. How to handle money is largely taught by parents. Many young people are given an extended allowance from the age of 12. Youth salaries are often mentioned. It’s a term that the non-profit organization Jugendlohn promotes and explains in detail on its website.

The idea is simple: With the extra money, young people take responsibility for some of their living expenses. This means that the youth pension covers expenses for going out such as clothes, hairdresser, mobile phone, hobbies or the cinema.

This fee only includes expenses that would already be incurred. However, instead of paying from the parents’ wallet, payments are made from the children’s account. Youth wage has no impact on the balance of the family fund.

digital money

For digital natives, using e-banking is a breeze. But you must learn how to deal with your financial means and also resist the temptation of online stores or app purchases.

Ideally, young people’s salaries are transferred to an account. Thanks to e-banking, young people can always keep their financial situations under control and keep their expenses under control thanks to the determined limits. The same goes for Twint. Clear limits per day and month can be defined when changing the digital wallet. With a prepaid credit card, you can make cashless payments without the risk of exceeding your budget.

To define this budget, the Youth Wage Association recommends writing down expenses over several weeks. From here you can calculate the amount you need. At the same time, parents and the child decide together how much the fees should be paid: including the cost of a smartphone, Spotify or clothing, as well as an amount for free use. That is, what was previously paid as pocket money.

Step into independence

Framework conditions provide orientation to young people and aid implementation. Anyone who pays children a youth pension gives them even more independence along with responsibility and freedom. “Young people need to learn to manage their budgets,” says Andrea Fuchs. This also includes making bad financial decisions. That’s why it’s important not to help immediately when bottlenecks occur, she emphasizes. Instead, we should look for solutions together.

How much money young people need cannot be calculated using a simple “age times sum” formula. The question is even more: What can I afford with my money? Anyone who learns to manage this way will benefit from it in their adult life. Because it’s often about how to plan financially, how to save money, or how to weigh consumer wants against necessary purchases.

Source : Blick