Parenting teens to be financially responsible

Dr Asha Pemberton

teenhealth.tt@gmail.com

ADOLESCENCE sets the stage for responsible and functional adult life. Behaviours that tweens and teens adopt during this stage of development are likely to persist into their emerging young adulthood.

Despite living in a time of relative excess as compared to generations before, it is important that teenagers recognise the value of money and understand that it is a finite resource.

Popular culture celebrates opulence, extravagance and rapid wealth of youth. While for a very few this may be their reality, for most of the world’s youth these images are merely aspirational, unrealistic and non-sustainable for those who attempt.

Young people do not learn money-management skills until they are given the complete freedom to manage their own budget and live with the consequences of poor spending. The valuable lessons learned from budgeting include the discipline to spend only on what one can afford and accepting the consequences of poor planning and sudden expenses.

While there isn't large literature in our context, data from North America suggests that only less than half of teens who get money, in the form of an allowance or pocket money, on an irregular basis keep track of their spending and saving. This compares to over 75 per cent of those who get an allowance regularly.

Even if small, the consistency of a stipend teaches young people to be aware of how their savings can grow, if attention is paid, or conversely how little they have in hand if they spent recklessly. The focus should not be on large sums of money, but rather allowing young people appropriate but consistent opportunities to manage their own finances for personal spending.

Building from this concept, young people should ideally earn their allowance in some way that benefits the entire family. This models the reality of adult life, in which financial reward is obtained through the provision of goods or services and then compounded through saving and investment.

Tweens and teens should be provided an allowance after completing supportive roles around the home. These can include household chores, gardening, pet management, cleaning cars or even care of younger siblings or extended family. Thereafter, open dialogue should continue between parent and teen to help them determine how best they want to spend their money and then create a budget accordingly.

There is no shortage of enticing items that woos money away from young people. From social activities to food, clothing, gaming and internet-based subscriptions. Youth will not suddenly develop the skills of budgeting and require parental guidance and feedback.

Parents play perhaps the most important role in teen financial health due to their own actions. It is imperative that young people obtain an honest and realistic awareness of the family finances and learn to live happily within their means. When parents overspend, make reckless purchases or constantly avoid bill payments due to debt, they teach young people that these are acceptable decisions to make.

In times of financial difficulty, young people should be involved in conversations where cutbacks and prioritisation occur. This helps to reduce their own frustration and resentment, and also typically spurs them on to work more efficiently to eventually contribute to their family.

Also, when parents enjoy times of more financial comfort, teach youth that the next step should be investment and saving and not lavish spending.

Young people of this generation are generally very well aware of the value of money, but for many not enough attention is paid to wise spending and focus. It is never too early to teach young people these valuable skills, as they are essential to adult life.

To reiterate, allowing young people an allowance, apart from money required for transportation or meals, supports this aspect of their development. It need not be a large sum, but with consistency, communication and consequence, it can yield dividends toward their future financial stability.