Is your teenage child asking for extra pocket money recently?
And you’re worried that they might be spending more than they can afford without being financially responsible?
Well, it’s time to set some financial rules and learn how to say no without alienating them.
Monitor spending and look for red flags
Excessive spending in recent months can be a sign of trouble, signaling that your child might have gotten themselves with the wrong crowd or are hiding something.
Maybe they are going for more expensive stuff, spending impulsively, or wanting to fit in with a certain group on social media.
If so, this is a good time to discuss the value of money and ask them what they think responsible spending habits are.
Then, take the chance to explain why money shouldn’t be spent carelessly without giving much thought.
Have an honest conversation about their spending habits
Before pinpointing their spending habits, it’s always good to be vulnerable first.
And by that, I mean opening up about the financial mistakes you’ve made and how that made you pick up healthier spending habits.
Yes, it’s hard to admit our mistakes, but those lessons learned don’t have to be yours only to remember. It can be a learning resource for your kids!
You may also want to walk the talk by modeling good financial behavior, whether that be budgeting or maintaining a savings account.
Also, reinforce the difference between needs and wants in life, so it’s clear what should be in the essential “cart”.
Stop giving additional pocket money until you see change
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Yes, you love your child, and giving extra money can be your way of expressing yourself as a busy working parent.
But you don’t want to feed their recklessness in spending decisions.
So a wise way to handle this situation is to stop providing bonus pocket money until you see some improvements in how they are handling their existing allowance within their daily or weekly budget.
And if they have never budgeted before, this is a wonderful opportunity to introduce simple budgeting tips with broad categories such as saving and spending.
Encourage them to get a part-time job during the holidays
If your teen is of legal age to work, why not encourage them to find a part-time job during the school holidays?
Getting out there into the working world is, in my opinion, one of the best ways to teach your child about financial responsibility and independence.
When teens get a taste of what “work” is like, they will likely understand how tough it is to earn money. Unlike spending money given to them, they will probably think twice and thrice before spending that dollar they’ve earned.
When it comes to your teen’s money-spending habits, lay down some boundaries. Telling them “no” in a loving way isn’t easy, and it’s important to explain your reasoning behind not giving in to their requests—so they understand that it’s not just a flat-out refusal. Share that you’re not a fan of irresponsible spending and let them know that they are responsible for setting a budget and sticking to it. With open communication, you will be able to nip money issues in the bud and ensure that your teen has the financial savvy to make it in the real world when they graduate.