For today’s kids, having a cell phone is more than normal. The devices let children connect with parents not only in emergencies, but also for everyday events, such as reminding each other about an after school practice or finding each other in a crowd. The fact that many models also can get online, play games and snap a candid photo or two doesn’t hurt, either. If the bill for your child’s phone makes you wince, though, there’s good reason to look more closely not only at the phone usage, but how he handles his money in general.
Dozens of Texts, Calls, and Downloads….One Big Bill
Young people don’t often keep track of how often they are texting, calling, or downloading with their phones. This is fine if your child’s phone plan is unlimited, but many aren’t. Once your child reaches the contract limit, the cell phone company won’t hesitate to tack on fees for every area where your child goes over. A few cents or dollars per event might not seem like a huge deal, but over dozens of calls or data transfers, the charges quickly can add up. There have been cases where children have wound up with bills in the hundreds of dollars, with some extreme instances surpassing the $1,000 mark.
The Need to Master the Phone Bill
When a child uses a phone irresponsibly, it’s a sign that he’s not associating what he is doing with a cost. Much like people routinely misuse credit, thinking of it as “free money,” kids keep on “spending” with their phone, not thinking about whether they are within their budget or whether they will be able to pay off the bill that results from their activities. Parents who cover these costs similarly are a lot like creditors, taking a financial hit by covering costs for which they never get reimbursed
Kids, like adults, tend to be creatures of some degree of habit, so if they are not tracking “spending” with their phone, they likely are not doing so in other areas, either. The result can be having a hard time saving, needing to borrow money from you or others to buy what they need (this might come as an advance on an allowance), and being unable to determine whether funds are available for additional purchases. If you want your child to be able to manage money well and not get into debt, forcing him to manage his phone bill is a good starting point, because he likely will see the phone as an essential and will be interested in being able to keep using it.
What Your Child Can Learn
Cell phones are ideal for teaching kids to budget because the plans are divided into different service categories (for instance, texting and data), just as you create different categories for your household expenditures. Most phone models allow your child to check their status in each of these categories throughout the month quite easily. You also can use a cell phone to teach your child other money lessons. When you look for a new device or plan, for example, you can talk about the importance of comparison shopping. You even can get into topics such as the use of insurance.
Cell phones are something that’s common for today’s kids to have. This is, in many ways, exactly what makes the phones so easy to misuse and take for granted. It is also the thing that makes it an excellent tool for cluing in about your child’s overall ability to budget and be financially responsible. Don’t hesitate to use it as a method of instilling good money habits if need be.