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Muslim parents often complain that their teenagers don’t get decent job. Of late number of middle class Muslim parents faces the opposite problem. Their money-minded children are earning big money and they do not have money sense. They don’t have the wisdom of how to and where to spend the money.
In a matter of months, these small-time Muslim entrepreneurs and professionals have the cash to become big-time spenders. No longer dependent on their parents saving they’re off to the mall, the video-game store, or the shopping mall to buy most expensive gadgets.
Early overindulgence is leading Muslim teens to unrealistic lifestyle expectations, weakening their work ethic and plunging them into disastrous financial practices that will haunt them for life, economists and employers say.
“They’re spending 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,” said Jerald Bachman, research scientist at the Institute for Social Research who first labeled the phenomenon “premature affluence.” “Once kids get accustomed to spending a lot, it’s a difficult transition to waiting and saving.”
Meanwhile, most simply assume they’ll hold jobs with high salaries, lots of perks and little grunt work.
“There’s a disconnect between effort and reward,” said Florida psychologist Gary Buffone, author of the book “Choking on the Silver Spoon: Keeping Your Kids Healthy, Wealthy and Wise in a Land of Plenty.” “Over time kids don’t learn to deal with frustration well. They’re used to getting what they want when they want it. And there’s a loss of energy, ambition and motivation.”
Buffone said families of all incomes succumb to overindulgence. “Spoiling kids isn’t tied to a parent’s net worth as much as to a style of parenting,” he said. “It’s where parents rely more on things and money than on direct involvement with their kids. It’s a kind of selling out.”
Professor Mel Levine from the University of North Carolina has recently advised parents to apply brakes on their kids’ spending. The basis? Early overspending could lead children to have ‘unrealistic lifestyle expectations’. This, in turn, could plunge them into ‘disastrous financial practices.’
Family psychiatrist Dr Syeda Ruksheda says she couldn’t agree more: “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. So, don’t give your kids everything even if you can afford it. She said”
Economist Prof RS Deshpande from the Institute of Social and Economic change says: “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. “Buy that?’
How do parents turn down the cash outflow when they no longer control the faucet? Teaching kids to manage money is never easy. These prosperous teenagers are at risk for what researchers call “premature affluence”-all the privileges of ready cash with none of the regular expenses. “With no rent to pay and with no groceries to buy, my 19-year-old son, Razzak, sees nothing wrong buying latest mobile handset costing Rs 35,000. And with real adult responsibilities just a few years away, you don’t have much time to teach your well-heeled child saving habits”, said Rabia Siddique.
The first thing to remember: “The kids are right: It is their money,” says Jayne A. Pearl, author of Kids and Money: Giving Them the Savvy to Succeed. But even the most entrepreneurial kids depend on parents to instill good fiscal habits. A random survey by Islamic Voice in association with Trend Research and Analysis Centre’ (TRAC) of 18-to-22-year-old found that 84% of kids say they learn about money from their parents-even though 43% say they seldom or never discuss the issue. If you’re son or daughter is earning big money, it’s time for The Talk-that should cover the teenager’s financial goals, why it’s important to save, and how to be a smart consumer.
Especially when teens are earning their own cash, your job is to help. “Set goals-don’t legislate,” says Pearl. Maybe your 21-year-old dreams of buying his own car in two years. Don’t just say: “You can’t afford that.” Instead, ask: “So how much would you have to save, at what percent interest, 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 Zakat or charities, and 25% to long-term savings. Short-term savings are crucial because they yield the rewards-a trip during holidays or an MP3 player-that make all that baby-sitting worth the effort. “Just be sure there’s a pause between the income and the outgo,” says Kate Kelly, mother of three girls and author of The Complete Idiot’s Guide to Parenting a Teenager. To teach that earnings bring responsibi-lities, figure out how your child’s income and allowance fit with expenses.
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 by their mistakes as well as successes.
• Show children how to make spending plans and keep accounts. Set a good example.
(The writer can be reached at mhl@rediffmail.com)
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