Keeping kids' phone and data bills under control
Ever seen the monthly phone or internet account and felt sick? It's called "bill shock", and there are many new ways families accidentally rack up hundreds of dollars of costs each month.
Luckily there's also now a fun, interactive website that's essential viewing for anyone with kids, phones and internet access.
The Australian Securities and Investment Commission's MoneySmart Teaching website is packed with clever tools and simulations that teach young people how to avoid the traps of choosing and using mobile and internet plans.
Chairman of the Australian Government's Financial Literacy Board, Paul Clitheroe, says the site's tools are invaluable as selecting the right phone and internet plan can be harder than buying a car or even a house.
"Unless you've kept track for a month of how many text messages, calls and data you've used, you won't know what's the right plan for you," Paul says.
"Then when you know your usage, you go into this market place of really complicated contracts and you probably won't find one that really suits you exactly."
MoneySmart Teaching has been created to walk kids through simulations that explore the many issues they'll confront when they have a mobile phone, including:
• how to find the right plan
• the real cost of downloading images and videos through social
• premium services and mobile advertising
• data roaming
• keeping your phone and information secure.
MoneySmart Teaching is also very teen-friendly and the scenarios that play out are realistic and engaging.
The MoneySmart Teaching resources have also been created in accordance with the Australian Curriculum, and are used by schools to support a range of subject areas.
Paul Clitheroe‘s tips for parents.
1. Choose prepaid for your kids – and possibly yourself.
"I really only got a sophisticated mobile phone when I turned 50, so it's all a new world. But to be blunt, I think I may be wasting many hundreds of dollars every year [on my current plans], because I haven't spent enough time yet [researching]," he says. "We're consistently seeing families where, as the kids get older, the combination of mobiles, landlines, and internet is getting towards half of the family's mortgage costs."
2. Know what the phone/computer is being used for.
What are your kids downloading and uploading, how often are they texting? Paul says internet and phone connectivity has potentially brought a whole adult world into young kids' lives.
"Now kids have smartphones and wi-fi access throughout the house, so parents don't know what their children are using their phones for. Young people have a right to personal space, but your family needs to decide where the line between personal space and parental responsibility is."
3. Turn data roaming off when you travel and explain why.
"With the dollar so strong, more families are travelling overseas. Eight million return tickets for overseas travel will be sold this year. I've seen families come back from an overseas trip with a $10,000 data phone bill from three kids."
Paul says it's often an innocent mistake. "Mum and dad say turn data roaming off, and whether they're in Italy or Sydney, an eight year old wants to talk to his friends. Then they get back home again and discover they've got a $2,000 bill for that child's phone. And the eight year old says: "Well you didn't tell me not to turn it back on!"
4. Shop around for plans that fit your needs and budget.
Paul says because so many families have pay TV, broadband, a landline and several mobile phones, their total communication cost will be the third-biggest monthly expense they have, after the house and car.
"All of a sudden you're looking at $4,000 to $5,000 a year.
You have to look at those things in a more organised fashion to keep your costs down. Being in control of your cash flow is the first step."
Visit MoneySmart Teaching to help your child understand what their online activities cost.