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How to instill good money habits in teenagers


Nidhi is the mother of 14-year-old Abeer, and has been having difficulty managing his demands. She keeps a close watch on how the money is spent and is confident that her son doesn’t have any bad habits. However, Abeer wants the latest electronic gadgets, money to spend in school every day, and over the weekends, when he is out with friends. He dislikes discussions about money and is quick to label any advice as a sermon. Nidhi wants him to imbibe the right values about money and spending. She wants him to learn good money habits, but wonders if it’s too late.

Nidhi needs to realise that Abeer is at an age where he will learn best from his own experience, not through advice or discussions. She should create situations that force him to deal with money. Giving Abeer monthly allowance to manage his expenses is the first step in inculcating financial responsibility. Nidhi and Abeer must both agree to this change and on the amount of allowance. She should remain firm with what she considers an appropriate allowance and should not be intimidated by Abeer’s tactics to increase the amount. Instead, she should explain the reasons to him and Abeer will be willing to listen since the matter interests him. They should also agree on the expenses that Abeer will be expected to meet from the allowance. It will be a good idea for Nidhi to initially pay the allowance in weekly instalments so that Abeer starts handling smaller amounts for shorter periods. He can then move to a bigger amount that lasts him the entire month.

Managing the allowance will teach Abeer to make choices, prioritise his needs and wants, understand that money is limited, and the need to save for things he really desires. It is very likely that in the first few weeks, he will end up spending all his money quickly, leaving little for the end of the week. Nidhi should be supportive and encouraging, but refuse to give him additional money or advance. Soon, Abeer will figure out how he can make the money last.

Nidhi must resist asking for an account of his spends unless she believes there is misuse. She must praise his small victories in managing money and reward him in a non-monetary way. Over time, as she sees him becoming responsible, she can expand the areas in which Abeer deals with money and makes decisions. It will act as a positive reinforcement for good actions and instill the money values she wants in her son.

Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.



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