Teens are arguably the most demanding and defiant of all age groups, yet at the same time, they constantly seek the approval of their peers. That often means owning expensive clothes and gadgets to show off to each other–items which, of course, ultimately come from their parents.
How Expensive Gifts Instil Poor Money Management Skills in Teens
These days, a lot of parents are employing the popular strategy of both quieting a teenager’s nagging and boosting his or her self esteem and popularity by buying expensive gifts. Especially with the emergence of popular shows like My Super Sweet Sixteen and Gossip Girl, adolescents are feeling more entitled to this treatment than ever.
However, while this might keep you, and subsequently, Mum and Dad, happy in the short-term, getting the pricey stuff you want now can have a detrimental effect on your development into a financially responsible adult.
Teens and Financial Literacy
If you think you’re an exception to the rule, know that high school seniors correctly answered only 48.3 percent of questions on a survey by the Jump$tart Coalition for Personal Financial Literacy. Even worse, these scores decreased from the same survey conducted in 2019.
When your parents give your gifts, whether it’s clothes, video games, a car or simply an allowance (yes, that’s a gift, too), you’re enjoying the benefits of their hard work without actually having to put in the same effort. You don’t have any concept of what it takes to acquire those things and keep up on the mortgage, too. That’s not to say you don’t deserve to get gifts or spending money, but there’s a point when you have to learn how many hours at the office it takes to earn enough for an Xbox or new Coach handbag.
After all, they’ll eventually stop paying for this stuff when you get older and are on your own (hopefully). But if you never learn the value of a dollar, as cliche as it may sound, it may become all too tempting to replace Mom and Dad with a credit card to fulfil that expensive taste some day. Less than half of the survey participants above knew that paying the minimum balance on a credit card results in interest charges, by the way.
How to Get on the Right Track
Worried about your own financial fate? There are a few things you can do to start learning better personal finance habits without giving up the gifts:
- Save Some Money: It might seem obvious, but saving money instead of spending it is actually really difficult until you train yourself to do it. Use online finance sites to find high yield accounts from banks that will give you extra incentive to sock some cash away.
- Write Down What You Spend: It might seem like you only spend £5 here and $10 there, but those small purchases can add up to a lot of money each week. Get in the habit of jotting down your expenses to get a picture of how much you’re really spending. You might be surprised.
- Get a Part-Time Job: It’s nice to get stuff for free from your parents, but nothing beats the independence of earning your own money. Not only will you build up work experience you’re going to need later on, but you might gain a greater appreciation for how hard your parents work to keep you pampered.
No one expects you to change your life and start turning away expensive gifts from your parents. However, taking a slightly more serious and proactive approach to your own spending habits can set you up for success in the future.