Parents often complain that their teenagers do not get decent job. Number of middle-class parents faces the opposite problem. Their money-minded children are earning big money and they do not have money sense. They do not have the wisdom of how to and where to spend their hard-earned money.
In a matter of months, these small-time officers have the cash to become big-time spenders. No longer dependent on their parents saving; they are off to the shopping mall, pretty expensive meal in restaurants, the mobile phone shops to buy the most expensive gadgets, branded clothing and shoes.
Early overindulgence is leading teens to unrealistic lifestyle expectations, weakening their work ethic and plunging them into disastrous financial practices that can haunt them for life.
They spend as soon as the money comes in the door, and in the future, that can mean that these young people end up back on their parents’ doorstep. This phenomenon is commonly labelled the ‘premature affluence’. Once kids get accustomed to spending a lot, it becomes a difficult transition to waiting and saving.
The Holy Quran says: “…and eat and drink and be not extravagant; surely He does not love the extravagant.” (7:31). This verse suffices to show the dislike of the Almighty for the extravagant people.
However, most of the youngsters simply assume they will hold jobs with high salaries, lots of benefits and little grunt work. Families of all incomes succumb to overindulgence. Spoiling kids is not tied to a parent’s net worth, as much as to a style of parenting. It is where parents rely more on things and money than on direct involvement with their kids. It’s a kind of selling out.
Parents should apply brakes on their kids’ spending. Early overspending could lead children to have unrealistic lifestyle expectations. This, in turn, could plunge them into ‘disastrous financial practices’. A reasonable amount of deprivation helps one to be a more motivated person. It builds character. I have seen affluent people give their kids everything, so the children have no ambition. They’re complacent because they know they’ll inherit Dad’s business anyway. Better, don’t give your kids everything even if you can afford it.
Any expenditure pattern, whether of a state, country or individual, is an indication of spending habits. If you give any young person lot of money in the initial years, it establishes a habit. Whenever income increases, so does the prosperity to spend on luxury goods. There is no saving for a rainy day.
How do parents turn down the cash outflow when they no longer control the expenditure? Teaching kids to manage money is never easy. These prosperous teenagers are at risk for what researchers call ‘premature affluence’.
With no rent to pay and with no groceries to buy, the youth sees nothing wrong buying latest costly mobile phone. And with real adult responsibilities just a few years away, you don’t have much time to teach your well-heeled child saving habits.
The first thing to remember: “The kids are right: It is their money.” But even the most entrepreneurial kids depend on parents to instill good fiscal habits. Children learn about money from their parents-even though they never discuss the issue. If your son or daughter is earning big money, it is time to discuss over the financial goals, why it’s important to save, and how to be a smart consumer.
Especially when kids are earning their own cash, your job is to help. Maybe they dreams of buying their own s in two years. Don’t just say: “You can’t afford that.” Instead, ask: “So, how much would you have to save to get the car you have in mind?”
Most planning focuses on a scheme for dividing the young workers’ funds into immediate spending, short-term goals, and long-term saving. Some parents advocate allocating 45% for near-term goals, 25% to routine expenses, 5% to donation or charities, and 25% to long-term savings. Short-term savings are crucial because they yield the rewards, a trip during holidays.
Parents have an opportunity and obligation to help their children gain knowledge and skills in managing money wisely.
• Guide and advise rather than direct and dictate. An adult-child discussion may be far more effective than a parental lecture.
• Encourage rather than criticize and allow children to learn from their mistakes as well as from their successes.
• Show children how to make spending plans and keep accounts. Set a good example.
Bashir Nuckchady
