As with many of the self-care skills, some young people will have grown up in an environment which did not teach or model good money management. With such a significant proportion of young people accessing AOD services being reliant on Centrelink payments, learning how to live on a very limited income is an important skill to assist young people to develop.
Below are some facts and links to use when providing information to young people about money issues.
Below is some general information on areas of money management that can affect young people. Where practitioners have some general knowledge, and know where to go for more detailed information, they will be able to provide guidance to the young person as the opportunity arises, either informally in conversations, or as part of a goal the young person has.
Having a budget means a person can understand how much money they get, and what they need to pay for with it, and how much is left over (if any!). Where a young person is consistently running out of money before their next payment, a budget and money management plan may help them to feel more in control of their financial situation. A practitioner may be able to help a young person to fill out a budget (see sample here) and realistic appraise their expenses. It may also be helpful to the young person to set up a separate, less-accessible, savings account if impulse-spending is an issue.
The ‘MoneyStuff’ website has a simple explanation of budgeting for young people.
Credit & Debt
For people on a low income, credit can be a very attractive way to manage financial constraints. Of course, just like taking benzos for sleep problems, it ends up making things worse. Credit companies are ruthless in their marketing at people on a low-income, and try to normalise debt as a way of coping with financial stress.
The issue of debt often arises from Centrelink over-payments (resulting in reduced income for a period), arrears on child support payments, personal loans, or informal loan or “Interest Free” loans. How interest is calculated may be unknown to the young person, nor the overall costs accrued when just the minimum monthly payment is made.
Another major cause of debt-stress for people, especially those who are already in poverty, is accumulated fines for parking or public transport offenses. Where the debt seems insurmountable, it is advisable to get professional assistance and advocacy.
Poverty is a risk factor in many adverse psycho-social outcomes, so assisting young people to get in control of their money can have a longer-term positive impact that may not be immediately apparent.
In Victoria there is an ‘Exceptional Circumstances’ provision that the court will consider for people with fines whose circumstances (physical or mental illness, disability, substance use, or homelessness) directly contributed to the accumulation of fines. Click here for a guide. It is detailed process, but where records were kept, it is well-worth pursuing for a young person. Victorian Legal Aid offers general information for young people with outstanding Fines & Infringements.
Young people can be particularly vulnerable to the ‘pay nothing up front’ promises that mobile phone companies use to offload their latest handset to people who otherwise wouldn’t be able to afford them. The mobile phone industry has a special knack of lacing contracts with hidden charges. Check out this video of one young persons experience. And check out MoneyStuff for comprehensive info for young people.
Young people can be particularly vulnerable to ‘too good to be true’ scams, deals, schemes, and impulse purchases . The following links contain information and teaching resources about refunds, Impulse Buying & Scams to watch out for.
Moneystuff provides a great overview of the things young people should know when renting from a signing a lease to getting repairs done.
Housing Tenants Union of Victoria offers free information and advice to tenants as well as advocating for the rights and improved conditions of tenants in Victoria.
Consumer affairs Victoria provides free over the phone information and advice to tenants of rental properties, caravan parks, rooming house or movable dwelling in Victoria.
In an Emergency
Most youth AOD workers collect crisis service contacts like bowerbirds collect sequins. Below are just a couple of links worth sharing.
Crisis Referral Information System is a mega search engine of crisis services in Victoria
Crisis Help Network is a directory of useful information curated by people who have experienced homelessness.
The Survival Fund provides ‘last resort’ financial assistance for almost any purpose considered necessary for the applicant’s health and wellbeing.
It may be useful to talk to the young person about their financial goals and write them down together. As with all life skills, it may help the young person to understand how budgeting can work in real-life examples (such as appropriate self-disclosure), rather than just ‘the theory’. Connecting a young person to Financial Counselling, particularly where they have a complex financial situation, may be necessary.
Where young people have not had the opportunity to develop assertive communication skills it may be a time that their practitioner can act as an advocate on their behalf in order to both model normal assertive behaviour (thereby teaching cultural competence) and to help resolve financial situations which may be an issue for the young person. Wherever possible, practitioners should advocate for the young person when they are present, to maximise the learning opportunity.
Where young people are experiencing hardship due to reduced payments through Centrelink debt, is may be possible to advocate for them to have the arrangements changed to reduce the hardship. There may also be situations where young people from CALD backgrounds, or for other reasons, did not understand what was required of them from Centrelink, resulting in a debt. Again, this is an opportunity to advocate for the young person.
Other examples of advocacy are:
- Sorting out Centrelink payment issues
- Querying mobile phone or other contracts
- Organising payment plan for debts
- Requesting refund for faulty goods
- Asking the bank to minimise account charges
The examples of advocacy above can also be approached in a collaborative way, with the young person performing as much of the tasks as possible, with the practitioner assisting them to negotiate processes and find solutions.
This element from ACRA includes having the practitioner and the young person role-play scenarios (such as making phone calls to other organisations) with a variety of outcomes, in order that the young person will feel more confident and prepared when making the real call. This may be a particularly useful approach with young people who have a history of becoming angry or ‘giving up’ when frustrated by systems.