What to do if your child asks for too much money
As your child steps into his teens and acquires a social circle, his financial demands will increase significantly. ET Wealth tells you how to handle the situation.
1. Explain the household budget to the child
Sit down as a family and explain to the child how you are managing the household budget. Do not shy away from sharing your income and outgo details, so that he understands which are the priority areas of spending like bills, rent, school fee, loan EMIs, premiums, and utilities. More importantly, he will be able to calculate exactly how much money is left after essential expenses are taken care of each month. When he knows the limits within which he can operate, depending on the money that you can spare, he might become more restrained in his demands.
2. Let him earn or save
If the child knows how much money you can shell out, and still wants an expensive video game or gadget, he will have to consider other options like saving or earning. You can guide the initiative to save by putting his monthly allowance in a recurring deposit or other short-term investing avenues. While part-time jobs are not a favoured option in India, the child can be encouraged to do chores for you that go beyond his routine household duties. He could, for instance, buy groceries for you from the local market, drop a younger sibling for tuition, or teach a particular subject to the sibling on a regular basis. Pay him what you think is a reasonable amount.
3. Don’t supplement the teen’s monthly expenses
If the teenager gets a monthly allowance and spends it all before the month is out, he is likely to pester you for his endless expenses, such as partying with friends or going for a movie. Be stern and do not offer handouts to sustain his spends. So, by all means, increase his pocket money from the early teens to late teen years, but make sure you stick to the assigned allowance. This will force him to learn how to budget and spread out his pocket money to last the entire month. If you supplement his allowance, his demands will gradually increase and his expenses may spiral out of control.
4. Learn to say ‘no’ without losing your composure
Every teen is equipped with the unique ability to argue endlessly, which translates to sustained rants over the need to finance all his demands. Over a prolonged period, the persistent pestering wears down a parent’s resistance and he gives in to the demands. This can be a dangerous precedence as his wants can rise incrementally. So learn to say ‘no’ and stick to the stance. Do not lose your temper and practise maintaining your composure. If you are consistent, the child will get the message and over a period of time the demands will come down. Or at the very least, he will find a way to fund them on his own.
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Disclaimer: The advice in this column is not from a licensed healthcare professional and should not be construed as psychological counselling, therapy or medical advice. ET Wealth and the writer will not be responsible for the outcome of the suggestions made in the column.