For parents, their child always remains a kid even when they have grown up to be responsible adults. However, keeping emotional ties aside, it is the duty of every parent to teach their child to be responsible. While parents want to ensure that they offer the best of everything to their kid, it is also their unsaid duty to raise financially responsible children.
From a very young age, children tend to pick up a lot simply by observing their elders. Hence, parents need to put in extra efforts to ensure that their teenager child is financially responsible.
Tips to inculcate financial responsibility amongst teenagers
Teenagers are usually burdened with school work, sports, and extracurricular activities,but what affects them most is peer pressure. Before they start comparing and make attempts to match their lifestyles with their friends, it is important to teach them finances. Helping your child manage his/her ownmoney is the biggest financial planning lesson you mayimpart.
- Share financial responsibilities
One of the most important aspects is for teenagers to understand the value of money. The sooner they understand, the better they will manage their finances. Teenagers often tend to ask for monthly pocket money from their parents. Fix a certain amount. Do not provide an additional sum, even if they are penniless by the end of the month. Being strict at this stage will go a long way.They need to know that it is not an unlimited resource and should not be wasted. By sharing financial responsibilities with teenagers, you will give them the freedom to spend on what they can afford and what they consider important. This will indirectly help them curb overspending. If your child overspends in a particular month, he/she will learn not to repeat the same in future.
Every individual learns from his mistakes, and so will your child.Do not run to cover up for his/herblunders. If they make wrong decisions with their money, let them help themselves to come out of the situation. Do not pay off their credit card balance for them. You can always guide them and help them in financial planning to manage their expenses, but do not handhold them in every instance. This is because if they know that you are there as a last resort, they might repeat the mistake in future.
- Set the right example early in life
Children learn from their parents and it is your responsibility to bea good example for them. If you are someone who makes quick decisions and overspends, your child will do the same. If you are someone who saves a certain percentage of your income each month, your child will learn from it and follow your footsteps. Inculcate the habit of saving in your child and teach them the importance of investing right. Include them in your financial decisions so that they are able to learn about the best investment options. Take them out shopping with you and restrict to a budget or let them go shopping for themselves, but ask them to stick to a limit.
- Encourage them to get a job
Children in their late teens usually look for part-time jobs during summer breaks or post-exam vacations. Encourage them to do the same as this will not only give them a practical approach to life, but will also help them utilize their time productively. Do assist them in managing their wages. Their initial wages may not be very high; this will compel them to save money and invest. This way, they will not overspend or take a debt that is difficult to repay.
Once your children begin to earn, you need to bring financial discipline in their life and teach them to save money. You can help them choose the best investment options and inculcate the habit of investment in high-return assets. Teenagers might not be able to understand the importance of investing initially, but at a later stage, they will be thankful for the steps they took. If they know that financial planning has helped you and your family in the long run,they will adopt the same approach in their life.
The Angel Wealth mobile application is an ideal tool for your child. It has an ARQ investment engine that functions on algorithms and offers customized investment recommendations to you. It is free of human biasand will offerthe right investment options to your child. Download the user-friendly app today and let your child start investing.