You consider yourself a nifty investor, and you are proud of your finances. Yet when you look at the financial actions of your growing teen kid who was recently gifted a brand-new gaming console by your partner, you mutter under your breath. We understand. It’s the usual drill in every other metro household in India. And it’s a moderately complex problem that needs to be tackled with a long-term approach.
Here is a quick guide on parenting a teen and teaching the value of money through interactive financial discussions blended into the familial fabric of your household. I offer no guarantee that your Fortnite-loving teenager will learn the basics of budgeting and saving and improve their finances overnight. But I can tell you this: if you put at least some subtle yet powerful methods into action, you will see some positive changes over time. Not only in your child’s behaviour towards money but also as a positive shift in how much you and your partner’s financial habits approach it.
Ready? Let’s start with an example.
The Case of the Parental Pampering
One of the biggest challenges about parenting a teen and imparting financial education is controlling impulsive purchases. Let’s look at an example: when you gift your teen child a PlayStation 5 for her 14th birthday, even where she already owns a perfectly serviceable PlayStation 4.
Why shouldn’t she get the best thing out there? I’m earning well; for whom? What’s the big deal? These are the thoughts that may cross your mind when someone questions you on the need to purchase an expensive gift. And that there lies the crux of the problem.
The crux is in the message that is conveyed to your daughter. When you gift a new toy or a gadget to your child, it can be a gesture of love and care. But when you grant something that does not fall in that category or is not a need-based thing, it can give your child a negative idea of money. They may feel that money is an infinite resource, and this belief can be challenging to undo.
This is why you need to make more thoughtful decisions when dealing with money for and around your children. It is best done jointly - starting with talking to your partner.
Discuss the Approach with Your Partner
Discussing household finances and managing it along with your partner is not enough when you have a kid. You also need to communicate about the type of financial education that you plan to impart to them.
For instance, in the above case, if you had discussed the PS5 gifting plan with your partner, you could have together influenced the situation. A discussion on the topic may have helped avoid the purchase and act to impart some financial wisdom to your daughter.
Another way to look at this example would have been if your kid insisted on getting the new PS5 (because her favourite vlogger got it). Here are some actions that you could try:
Educate her about the difference between the versions of the console and why buying a new one may not be worth it.
Convincing her on the importance of using that money to buy something more critical or needful (like an education software)
Entering into a hypothetical discussion about the fate of the old gaming console (plus discussion on electronic waste and the art of repairing)
Introducing budgeting concepts (using that money to invest for her future education)
As you can see, there are several ways that you can drive the conversation. How you do it and what words and examples you use will decide if your daughter understands and accepts it or uses it as meme content for her anonymous Facebook page.
Pro Tip – Make sure both you and your partner talk about money equally and that you both are on the same page. Different wavelengths can confuse children.