Helping a Child to Learn Good Spending Habits

One of the hardest things for a parent to do is to face the fact that their child is going through yet another stage of learning. Their spending habits as a teen may be worrying for many different reasons. Perhaps the background training you thought you had given them tipped the scales and made them so fiercely independent that it tied them in knots, wanting to have things before they could actually afford them. Perhaps it wasn’t your fault at all, but a growing trend for the teen to have things other people have, so as to be accepted. Teen life is difficult at the best of times, but seeing a teen getting into debt is a terrible situation for parent and child alike, making discipline ineffective and alienating.

*Honest and upfront.

*Assessing the damage together.

*Making them face responsibility.

*Helping them learn to balance the books.

*Helping them reap the rewards.

*Seeing them grow up stronger.

Honest and upfront.

If you know that your child is in debt, you have achieved one part of the struggle, as many children will not admit to parents that they are. What parents will see is that the children depend more on pocket money day, or want to have loans in between to cover expenses. Giving in isn’t very helpful, as this may be the easiest way out, but the message it gives is that it’s okay to want more and to expect it.

When the warning signs start to show themselves, sit down and talk. Ask them about their debt, and talk about your own situation. Let them see that you don’t expect them to be perfect as they will find it hard to admit anything to a parent who is too judgmental. When you reach the stage when a child can be honest and upfront about their problems, this helps you to assess the damage.

Assessing the damage together.

At this stage, go through the debts with the teen. Write them down, so they get a clear picture of what those debts involve. Work out ways that payments can be met, though giving them a blank check to pay their debts teaches them little about responsibility and even less about reality. Talk them through the alternatives, and let them guide you so that they believe the solution to be their own choice.

The problem here is that your suggestions will fall on deaf ears if they are imposed as restrictions. If, instead, you propose different methods in which they can face their own responsibility, you open up choices for them, and help them to understand the significance of spending wisely.

Making them face responsibility.

The car needs repairs. The insurance is overdue. The prom is coming up and the child needs the right outfit. Of course, as a parent you will bear a proportion of any spending a teen incurs, although make them aware without nagging that you need to arrange finances to meet commitments. All of these things seem very urgent to the child. The car which won’t work is no use to them or their social life, though if you can come up with ways in which they can contribute to the cost of getting that car back on the road, what you do is offer them possibilities. It is these possibilities which help them to learn about spending wisely and saving for things which matter.

Helping them to learn to balance the books.

By the teen years, they may already have a banking account, and learning to balance the check book against statements is essential. They may look at a statement and believe that what the statement says is what they have left. Many teens fall into this trap, not because they are foolish, but because they are inexperienced. If you give them the experience, they can use this to balance the books and realize the true situation. Similarly, they may be offered credit cards. Talk to them about how credit cards work. Show them an example of what they borrow and what they will eventually pay back. The advertisements on the television and in the stores play on their teen sense of urgency to own things, and don’t tell them about the consequences of debt.

Helping them reap the rewards.

The nice thing about teaching teens is watching them grow in knowledge. When something good happens like making a saving on something, or managing to buy something they have saved for, enjoy the reward with them. Teach them wise spending moves, and let them astound you with their ability to bargain. It is moments like this when they will be proud of their achievements. If they wish to buy something, teach them how to research for the best deal, then let them do the work. By doing this, they learn to be resourceful and to spend wisely, rather than jumping on the first temptation which crosses their path.

Seeing them grow stronger.

Most teens actually want to be responsible for their own lives. Of course, this isn’t realistic, but what happens is that their spending habits can get them into more trouble than they bargained for simple because a part of them is telling them they need to do things alone. It’s a natural attitude to have. These kids who are half way between adulthood and childhood are standing on a standing stone which takes them forward into being adults. Whether they slip and stumble on the way, it is a parent’s job to offer them a lifeline, and teach them how to step from one stepping stone to the next, rather than just fishing them out and hoping they will learn. By being there, each step of the way, you can enjoy seeing them grow stronger as adults, and enjoy the last years of their childhood with them, celebrating their entrance into being a grown up.