Most of us struggle with wanting to compete financially with our friends and family, and even our peers. When we see a friend with a nice car, huge house, and beautiful clothes, it’s tempting to try to match that person, but many of us can’t afford to spend like there’s no tomorrow. Our kids face constant peer pressure at school and with friends, and many of them feel the need to spend money in order to impress and keep up with them. Peers influence our kids in many different ways, including encouraging them to steal, cheat, use drugs or alcohol, or participate in other negative behaviors. While these behaviors make poor spending habits sound like a small issue, children need to learn to save money and spend wisely. Here are five ways you can help your child if he or she is struggling with the need to spend like his or her peers.
1. Set a good example
When we regularly indulge in purchases that we don’t need, and especially if we regularly talk about or verbally covet other people’s things, our kids learn from us. If you struggle regularly with peer-pressure spending, you can change your own habits, as well. If you’ve made mistakes in the past and your child has watched and learned from you, discuss your own mistakes with your child. Children need to hear the importance of saving and of spending wisely from their parents, and your willingness to admit your own mistakes will say a lot.
The T. Rowe Price 2013 Parents, Kids & Money Survey found that while 73 percent of parents report that they are having regular conversations with their kids about money, the children of these parents reported that the conversations happened less often. If you have a conversation with your child about money, make sure that the conversation is significant. Only 19 percent of children surveyed strongly agreed that their parents encouraged them to talk about money.