Why Parents Should Not Overspend on Their Children

Most families world over operate on a tight budget since the standard of living has gone higher than expected. The phenomenon has denied many parents the opportunity to enjoy life to its fullest. Parents whose daily earnings is below a dollar are left with no option but to spend the meager income on food and clothing. They have no or little money to spend on luxury such as holiday, making investment in real estate, securities and even saving for the future use.

Children who come from such poor background are made to understand from an early age that money is hard to come by. To the privileged few, parents would part with money only when providing for pocket money to high school going age, no extra cash for personal needs. For instance asking for extra money for personal use would elicit such an answer as "I'm I not providing for everything?"

This trend was highly rampant in the previous generation. The current crop of parents would squeeze their tight budget and fix some money for their children's leisure or shopping. Despite higher cost of living they would still spend most of their income to give children whether in allowance or whenever the kids ask for such money. The urge to please the young ones is seen by many investment analyst as a time bomb.

After spending heavily on recurring expenditure, parents are left with little money to save. When the parents turn old to perform any income generating activity, the kids may not be of any assistance in taking the responsibility button. Parents who please their children with money are in greater risk. They do not take early precaution to invest, join retirement schemes or take insurance cover. Such parents will be disappointed with what they did not do.

Some research indicates that parents would part with thousands of dollars in annual expenditure for their children's other needs. The hard earned money is spent by the youth on trivial things like mobile phone airtime, raving, beverages and snacks. It is worth noting that even with the existence of affordable banking services, only a chunk of the youth would engage such services. Parents are advised to give their children money in allowance, a period of after one month or at least after two weeks. This will enable the children to adopt the saving culture. Money dished after a month or fortnight makes them believe that they are spending their own money. This inculcates responsibility.