Signs that your teenage kid is heading towards financial disaster

Source: The Hitavada      Date: 08 Oct 2015 11:02:25

 

Aug 2 By Ketki Herlekar

Your babies mean the world to you but they could make you want to pull your hair out just as easily. Everybody knows it’s not an easy task to be a parent of teenagers, however new age and ‘cool’ you may be. Neelima and Harish are proud parents of twins studying in Grade 11. They are happy that the twins are doing well in school, studies and otherwise. Being new age parents, they have ensured that their kids enjoy a lot of freedom to choose the things they want to do. But they ignore the fact that their teens were floundering when it comes to money management. A proactive watching of these early signs made it easy for them to turn the situation around.

Wanting everything new
 
It is said that the new generation is all about the now. They want everything now. Right from new gadgets, to clothes to shoes and more. Anything that was the latest in the market would be bought by the twins, no matter what the cost. Neelima was of the opinion that they should have the best of everything. That is the opinion of any parent. However, we need to teach our kids the right spending habits. Kids often emulate parents; consequently the onus is on the parents to set the right example. Frequent shopping sprees, whether in that neighborhood mall or online, should ring a bell that your kid is not on the desirable financial path.

Not being aware of family finances

Harish was in the process of setting up his venture and the family was aware of the money needed for that. They had decided to cut down on their expenses to sail through the initial teething months. But the kids did not appear concerned about it and went ahead with frivolous expenditure. Teenage kids are old enough to understand about the financial conditions at home. When they do not make an effort to learn about it or contribute their bit, it is a sign of danger. Watch out parents!

Overspending pocket money

Every kid is happy to earn a small bit of allowance every month. As important as it is to give an allowance to your child, it is much more important to keep a tab on it. Neelima and Harish never took their kids allowances seriously. Any time they asked for more money, it was given, no questions asked. Pocket money is an effective tool to teach kids basics of money management. Do not indulge them with demand for more when there is no warranted reason. Get them to budget and save for bigger expenses, like buying a gadget, expensive clothes etc.

Preferring Hard Cash

Bank accounts are safer ways of storing money at any time. Parents should see signs of financial indiscipline when your kids prefer hard cash over putting them into bank accounts. Bank accounts opened for kids often come with a debit card facility. It not only brings in a sense of financial discipline in kids, tracking and monitoring their expenses becomes easier.

Reckless use of credit/debit cards

Cards for many teenagers are akin to blank cheques. Expenditure on this front can go into dangerous territory fairly quickly. The twins here had an add-on card. Each time expenses went beyond the limit, Harish warned them, but never took any action. He did not bother to educate them on the right way to use credit/debit cards. As far as teenagers go, it is good to establish good spending habits with a debit card, before handing them a credit card.

Lending money to friends

Helping someone in need is never a bad thing. Conversely, when there is frequent borrowing and lending of money between teenage friends, something is not quite right. It means that each of them is on the wrong side of money management. Many a times, when parents refuse, teenagers seek money from friends. Look for signs when your teenager is indulging in this sort of behavior. Talk to them and nip these kind of problems in the bud. Financial habits during teenage set stage for actions when they grow up and take charge of their own finances. Your kid will definitely appreciate all your little lessons when they are older. After all, the definition of a ‘cool’ parent is ever shifting. (Bankbazaar.com)