Everyone knows that teens aren’t the best at handling money. They are notorious for making costly mistakes that their parents usually have to bail them out of. However, by analyzing the spending habits of teenagers, it’s possible to learn from their common errors and take lessons for the next generation of rebellious youths.
1. Buying beyond their needs
Teenagers are impulse spenders and it’s very easy for them to buy something they think they need, when in reality it is a want. Not having to pay a mortgage, utilities or a car payment leaves many teens with a disposable income and no sense of what real responsibility is like. They may justify buying designer shoes by saying they needed shoes anyway, so why not get the best ones?
Unfortunately, the ability to distinguish between wants and needs is something that parents must teach the kids. At times it may be easier to just write off your teen’s spending habits as a lesson they will need to learn the hard way, but teaching your kids the proper money management tools they will use as an adult will make the transition from adolescence to adult hood that much easier. Refrain from giving your kids extra money when they spend theirs on something they want rather than something they need.
2. Purchasing expensive brand name items
Teens use brands and labels as a way to establish their class amongst their peers. Unfortunately, this keeping up with the Jones’ mentality carries over into adult life, which can cause financial chaos. It’s okay to indulge your kids once in a while, but if they constantly need the best, most expensive version of everything, you may have a problem. Try compromising with your kids, give them some of what they want, mixed in with a lot of what they need. Expensive shoes don’t need to cover expensive socks.
3. They don’t shop around for their purchases
Teenagers usually buy what they want when they want it and when they see it. They don’t do research or shop around for the best buy. This type of behavior is learned from parents, so the next time you are in the market for an expensive item, have your teen help you locate the best deal on it. Teach them that patience is rewarded and impulsiveness leads to regrets.
4. Go overboard on celebrations
Teenagers don’t see a problem with spending outside of your means for parties and special occasions. Furthermore, with a teenager, any event can be a special occasion that calls for a celebration. Only throw your kids parties when it’s warranted and don’t celebrate any event that involves spending money, such as buying a car or purchasing a new laptop or gaming system.
5. Misusing their parents’ credit cards
Some kids – not all – see mom and dad’s credit cards as ways to get the things they want. They understand the buy now pay later convenience of the credit card, but when the time comes to pay the debt back they fault, leaving the parents cleaning up the mess. Don’t lend your kids your credit card. If they need plastic, give them a prepaid card to use instead.
6. Spending money on unhealthy or illegal habits
Teenagers are extremely prone to peer pressure. They can spend a gross amount of money on alcohol, drugs, cigarettes and other unhealthy habits. Sometimes, they will even start treating their friends to get them to indulge in the habits as well. The group mentality is not only dangerous, it’s also expensive. Keep tabs on who your kids are with and what they are spending money on to stop a bad habit before it starts.
If your kids are committing any of these mistakes, take the necessary steps to intervene as soon as possible. You need to teach your kids to be financially responsible and independent before they wind up dependent on you or the government. You can make a difference in your kids lives if you lead by example and correct behaviors as needed.