I’d like to get my teen who has just started college to understand financial responsibility. What can i do?
As parents, we play a very crucial role in shaping adolescent financial behaviour and attitude towards money choices. Here’s how to go about it.
Teach basic accounting skills
Get them familiar with budgeting, spending and saving terms. Introduce them to beginner accounting software, which is available free online and can be downloaded in your mobile for quick accessibility to keep track of their daily outflow. This will lead to a lifetime of strong accounting skill.
Help them understand wants and needs
Needs are basic requirements – food, shelter, and clothing – while ‘want’ is more what they are craving for. Kids need to understand that if they want to make a purchase of their choice, they need to build up a fund, and may also need to make sacrifices to buy it.
Get them to develop a saving habit
Every single time they earn money, be it a gift or pocket money, ask them to make it a practice to save a portion of it.
Make them accountable for their spending
Teach teens to take up a few responsibilities and fund their expenses from their own pocket money. This exercise will encourage them to learn money management.
Control card usage by reducing the limit. Your teen should have knowledge about using credit cards wisely and what their responsibilities are if they do. This will give them the autonomy to use the card, but they will also be accountable to pay off any balance in time to avoid bad debt.
Encourage them to take up a few mediums that can generate additional income for them. This could vary from tutor services or running a garage sale, and even chores like walking the dog or tending gardens.
Dhiren Gupta is a financial expert and managing director of 4C Mortgage Consultancy. Got a problem? Our fantastic panel of renowned experts is available to answer all your questions related to fashion, well-being, nutrition, finance and hypnotherapy. Email your queries to firstname.lastname@example.org.