MONEY LESSON: HOW PARENTS CAN TEACH TEENAGE KIDS HOW TO SPEND AND SAVE WITHIN A BUDGET

Struggling with teaching your teenage child the value of money? Wondering how you can discipline your child towards finances and a change towards budgeting for expenses? Let’s take a look at a quick example:

Nidhi, the mother of 14-year-old Vidhi, is facing challenges in managing his financial demands. Vidhi desires the latest gadgets, money for school expenses, and social outings with friends. Despite Nidhi's vigilant oversight, Vidhi seems resistant to discussions about money and dismisses advice quickly. Nidhi wishes to instill responsible money habits in Vidhi but wonders if it's too late.

So what should Nidhi or for that matter any other parent do for their child?

For one, Nidhi should create situations where Vidhi must handle money independently. Providing Vidhi with a monthly allowance to manage her expenses is a crucial step in nurturing financial responsibility. Both Nidhi and Vidhi should agree on the allowance amount.

Nidhi should stand firm on the agreed-upon allowance and explain her reasons to Vidhi, fostering open communication. They should outline the expenses Vidhi is responsible for covering with the allowance. Initially, Nidhi can provide the allowance in weekly installments to allow Vidhi to handle smaller amounts gradually.

Managing her allowance will teach Vidhi to prioritize her needs, understand the concept of limited money, and save for desired items. Initially, Vidhi may exhaust his allowance quickly, but Nidhi should refrain from providing additional funds and encourage her to find solutions to make the money last.

Nidhi should avoid scrutinizing Vidhi's spending unless there are concerns about misuse. Instead, she should acknowledge her progress in managing money and offer non-monetary rewards for achievements.

As Vidhi demonstrates responsibility, Nidhi can expand her financial responsibilities gradually, reinforcing positive behaviors and instilling desired money values. Through this gradual approach, Nidhi can empower Vidhi to develop strong financial habits.

With inputs from Centre for Investment Education and Learning content which appeared in Economic Times