Sink Or Swim? What Parents Can Do For The Kids

Early guidance will help them manage their finances as young adults

- Susan Hely

The teenage years are often the spending years, beginning with mobile phones, clothes, electronics and going out. Then come cars, higher education fees, travel and, if they move out of home, more bills.

Many teenagers find it hard to save money. Often they have a sense of entitlement that is hard for parents to live with, and while you want to help them you don’t want them to slip into a habit of overspending.

You want your kids to manage their finances day to day, keep track of their expenses and resist the temptation to spend money they don’t have. But it doesn’t happen automatically.

After all, they don’t really need to be responsible for money, with parents paying all their living costs. They don’t understand what saving for a rainy day is all about, for example. Also money these days is invisible, so kids don’t see their savings build up in a piggy bank as their parents did.

Research says kids develop their emotional approach to money when they are young. They pick up on parents’ attitudes and knowledge, and are also influenced by their peers, social media and advertising. Parents and grandparents are a good guide to help them through the dilemmas of spending and saving.

Parents need to hit the right note about money and get their kids’ attention before they tune out of parental advice as they grow older. Putting in place a regular allowance and talking about their money may seem unnecessary – particularly when they aren’t interested – but its real importance becomes apparent in early adulthood when they can access debt.