How to Turn Your Child’s First Phone into a Money Lesson – MoneySense

Yet many parents can only wait a while before giving their child their first smartphone. And if you do, experts say it’s up to parents to put the right guardrails on the device, especially since most phones are designed to make spending easier and sometimes invisible.

Turn a first cell phone into a money lesson

“Giving your child their first cell phone can be a great learning experience—an opportunity to naturally build a money lesson into your daily life,” says Robin Taub, author of the book. The wisest investment: Teach your children to be responsible, independent and money-conscious for life.

The first step, she said, is to sit down with them and discuss the various costs associated with owning phones, and explain who is responsible for them. There are some obvious costs: the phone itself, a phone plan, a case, and sometimes a phone protection plan.

Taub said that if a child is on the younger side (about 13 or 14 years old), you can start by teaching him about data overage, connecting to wireless networks and turning off data roaming while traveling to avoid a big bill. For older teens, she says parents can gradually transfer the responsibility of paying the phone bill to them.

When the telephone costs exceed the bill

But there are many other, less visible charges, such as in-app purchases or trial sign-ups that can be surreptitiously added to a credit card.

Rebecca Snow recalled her children playing a popular online world-building game, Roblox, which often requires in-app purchases for new avatars or outfits for the characters. “They always asked me, ‘Can we get Robux?’” says Snow, co-founder of the Toronto chapter of Unplugged Canada, a group that advocates for smartphone-free childhoods. “They didn’t realize that I was actually spending money on Robux, buying these little digital tokens to get little outfits for their avatars.”

Certified financial planner Kalee Boisvert is also familiar with requests for gaming token purchases. When Boisvert’s eleven-year-old daughter – who has a smartphone without a mobile subscription – asks for in-app purchases, a conversation ensues. “It’s just a matter of discussing priorities and talking to them about what’s important,” she said. For example, Boisvert reminded her daughter of an upcoming trip to Disneyland and how she could better save for something she might want to buy there.

Build financial literacy before digital independence

Snow said there is a strong need for financial literacy before children get their first smartphones. She said her 12-year-old son, who does not yet have a smartphone, uses a pocket money app called Mydoh on the computer or Snow’s phone to understand the concept of saving and earning through chores around the house.

“I can say, ‘Okay, if you take your lunch box out of your bag every day, click this button on Mydoh and you’ll get two dollars a week for that,’” Snow said. She said these healthy online financial habits will come in handy when he eventually gets his first smartphone.

Margot Denomme compares giving teens and teens smartphones to driving a car. “It’s as if our children take the car with them as soon as they get their driver’s license,” says Denomme, founder of an advocacy group that raises awareness of digital dangers. “We don’t just give them the keys and ask where they are going.”

Before handing over their phones, Denomme said parents should disable in-app purchases and enable parental approval for every purchase. Even after setting up their phones for use, she suggested first checking in with the kids weekly or even daily and asking what kinds of activities they’re doing online.

“I encourage parents to engage with their children online to show understanding and help point out warning signs,” she said. Denomme said parents often take their children’s privacy too seriously. “No, it’s your phone. You bought the phone and it’s okay to make these accommodations,” she said.

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