Teenagers and money: How much is enough?

My kids, aged 14 and 9, sometimes wish I was not a financial advisor so that I would allow them to spend the way they liked. Clothes, books, shoes, art supplies, junk jewellery, makeup, gadgets, classes - the list of things teenagers need is endless. Not to forget outings with friends. In today's time, one needs to be rich or indulgent to be able to meet kids demands.

And many parents are doing just that. My kids often tell me how their friends get everything so easily, whereas I keep questioning them on the need to purchase a particular item. At the age they are, they are discovering new things and want to have it all. Of course, peer pressure also plays a huge role. They don't want to be left behind and not be seen as cool. But for me, instilling the value of money is very important as I don't want my kids to end up like so many GenX people that I see today - spendthrifts with too many loans and no hope of ever being financially independent.

However, it is a constant fight and challenge to instill the value of money and here are some things that I am doing:

Ensure your spouse is in it with you. Often, I find mothers to be strict and fathers to be indulgent. If both parents are not in sync, there is no way the kids are going to listen to the strict parent.

Take kids shopping for groceries so that they slowly get aware of how much things cost. It's easy to keep asking for things when you don't know how much they cost.

Don't always say yes or no. Every year, I find schools ask children to buy a new set of art supplies though they may have a set that is in working condition. For most things, I buy based on needs. And for the things that are required for activities that the child likes, I spend on them within limits. My daughter is a good artist and needs different types of pens, brushes, etc, which I let her buy. But I don't go overboard. When she wanted a set of Stabilo pens (which cost between Rs 300-1,900 based on the number of pens in the pack), I chose the one with 20 pens instead of the biggest size available. I do see this tendency in parents to overspend on things that may not be completely used.

While giving gifts to friends, I try to ensure they are within a reasonable budget. Cash gifts received from grandparents or relatives are partially spent and partially invested. I usually allow them to spend 50% of the gift money for anything they wish to buy, how much ever expensive it is.

Also, be indulgent in a balanced manner. Of course, I take my kids for outings where we spend on horrendously expensive frappes or gelatos. I do make them aware of the costs involved because I don't want them to believe that drinking frappes is mandatory in every outing.

As a parent, it is always difficult to strike the right balance and bring in cost consciousness, just so that kids don't grow up believing that one is earning money to spend on lifestyle expenses.

After struggling to be at it for the last few months, I am happy to see that my daughters have started checking price tags on items and checking if it is expensive or within budget to purchase.

There is still a long way to go and the bigger challenge is to ensure that they follow these principles even when they start earning themselves.

The writer is director, Finsafe India and co-founder, Womantra