Teach Budgeting With A Cellphone

For teens and preteens, having a cellphone is all the rage. And according to a recent article in  USA Today, more than a third of U.S. homes don’t have a landline. Parents have gone wireless, and in the interest of their children’s safety, many have provided their children with cellphones to have as a point of contact when they are home alone or in case of emergency.

But cellphones and children don’t always mix. Not only is there a hefty price tag, but there’s also a learning curve that children must navigate to avoid exceeding calling and texting limits. One Phoenix-area family has found a way around this challenge.

Rick and Sue Cercone canceled their landline phone about a year ago and, at the time, purchased a prepaid flip-phone for their then-10-year-old daughter, Katie, to use when she was home alone. Now almost 12 and heading into middle school, Katie wanted a better way to communicate with her friends. And while Rick and Sue weren’t opposed to the idea, they wanted to make sure Katie understood the value of the cellphone minutes she would be using.

The Cercones decided to use Katie’s cellphone as a means to teach her how to budget.

“We know that if Katie doesn’t have a tangible way to track her money, she blows it,” says Sue. So they purchased a cellphone with a preloaded card that Katie must budget to ensure she doesn’t run out of minutes.

Early on, Katie learned that one text equated to 30 seconds of talk time and a text with a photo was more. Once the card runs out, it’s up to Katie to purchase a new card.

“My parents are pretty hard to cough up money,” says Katie. “I have to save my money when I earn it now.”

Katie recently took a babysitting class and hopes to find jobs watching neighborhood kids and doing extra chores. She already saves a portion of her earnings, and now, rather than spend the remaining funds, she will set some aside to help fund her next cellphone card.

“Katie is learning that we’re not going to support her cellphone,” says Sue. “When she can tangibly see the minutes on her card go down, she knows those minutes have been spent.”

Though Katie wishes her parents would have simply added her to her family’s cellphone plan, Rick and Sue hope that, by budgeting her time more wisely, Katie will learn the value of a dollar and budget her money in other areas as well.