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Consumer Affairs
Thursday, September 4, 2014 - 08:14
Teen debt

According to a recent study, 21% of teens spend their money on clothing and food while 10% spend their money on personal care and accessories and a further 8% on shoes and electronics.

Wikus Olivier, debt counsellor at DebtSafe says, “When you are raising a family costs include the house mortgage, car repayments, clothing accounts and tuition fees. While it has often proven hard to maintain a standard of living without falling into some kind of debt, focusing on paying it off often diverts the focus from our children and their spending habits.
“Parents need to instil good spending habits with their teens as soon as possible. These lessons often set a firm foundation that transcends into adulthood. Introducing these lessons from a young age can further help cement the habit.
“One way of encouraging good spending habits in your teens is to explain the importance and benefits of saving. Rather than blowing all of their pocket money on that new pair of shoes or latest gadget, explain that saving for the item and setting a goal over a few months will allow them to have more money available for other things. This will also be more rewarding when the item is finally purchased.
“Opening a savings account for your teen will also encourage money management skills. Putting a portion of their allowance or salary into a savings account each month, along with the interest gained from this, will also ensure that a foundation of financial security in the future is carved out.”
Encouraging your teen to find a part-time or holiday job may also prove pivotal in introducing good spending habits. “We often take more responsibility and recognize the importance of prioritizing when we begin to earn our own money.”
Getting a summer job at the local music store, becoming a tutor or waiter at a restaurant will not only teach your teen to work for what they have, but also teach them to appreciate the money they earn.
“Furthermore, if your teen is too young to work at a restaurant or retail store, doing household chores for payment may also serve as a means to encourage good earning and spending habits. If your teen wants something they cannot afford, create an opportunity for them to make the money to pay for it. Mowing the lawn, washing the car or even taking the dog for a walk are all simple ways for teens to make some money.
“Monitoring the spending of your teens and creating boundaries around this from a young age is crucial as these small financial lessons can follow them into adulthood setting the foundation for a financially secure future.”

Copyright © Insurance Times and Investments® Vol:27.9 1st September, 2014
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