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Peer Pressure: Keeping Up With The Joneses' Teenagers

Friday, July 15, 2016   (0 Comments)
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Forbes.com 07/15/16

Teenagers have always banded together for support and camaraderie, helping each other negotiate the dilemmas of this world that only peers can give each other. Instantaneous social media connectivity has accelerated this phenomenon. Undoubtedly, this support is a necessary part of preparing to leave the nest and become the next generation to make its mark on the world. So, peer pressure is also a necessary part of growing up — and in many ways a good one. Unfortunately, teens are all too capable of reinforcing each other’s financial misconceptions. And, where financial misconceptions flourish, that’s where there’s fertile ground for all kinds of mini money disasters.

I might be understating “mini” because sometimes they become major financial disasters. Our teens have access to lots of money and buying power. Almost 42 million teens in the U.S. are spending an estimated $260 billion annually, according to a Statistic Brain Research Institute report based on Marketingvox/Rand Youth Poll research. Piper Jaffray, a leading investment bank and asset management firm, conducted a survey of 130,000 teens and found that clothing, accessories and footwear account for 38 percent of the total spend, which could add up to over $1,000 per year for each teen.

Teens are spending real money and think they understand the consequences; however, teens really aren’t knowledgeable about how to navigate even the basics of the financial waters. According to aCharles Schwab & Co. survey, there are “77% of teens who say they are knowledgeable about money management…” The bad news is that 38% don’t know how to establish good credit and 35% are not even sure how to balance a checkbook. The really scary part is that almost 20% “…say they’ve actually learned about money management from their friends.”

Let’s explore some of the Teen Peer Problems:

Peer-Pressure Problem #1: Keeping Up With The Joneses’ Kids

Teens are prime targets for marketing gurus. They want to be cool. Trust me; their definition of cool doesn’t match ours. What they don’t know is how much their definition of cool is a product of manipulation. Hundreds of millions are being spent by advertisers trying to lure these teens into not only buying products, but also more importantly, enticing teens to share their new products with peers. A 2013 Piper Jaffray survey confirmed that, “Teens have cited ‘friends’ as the strongest influence over their purchase decisions…”

It’s worth letting your teens know the tactics that merchandisers use, because it may make some difference. No one likes to be manipulated, and teenagers, with their instinctive distrust of phoniness, least of all. Encourage a healthy skepticism in your teens. Point out that advertisers see teens as an easy mark because they have a high penchant for spending on wants rather than needs, which makes them particularly vulnerable to hype. Explain that they are not cooler because they have the latest fad.

 

Peer-Pressure Problem #2: Lending Money To Friends

Teens are often overly generous with gifts for their friends. And, this can spill over when they are overly loyal to their friends, unlikely to exercise sound financial judgement. They are operating from their hearts and not from their heads. Many good friendships have been ruined when one friend lends to the other, and your teen may need to learn this the hard way. Many of us have been there.

Try to explain to your teen that, as soon as a friend owes money to you, the dynamics of the relationship may change. They are allowed to ask why the money is needed and they are also allowed to say that it makes them uncomfortable to lend it. They can use you, the parent, as the “Bad Guy.” That may be a safe out for them, because they do not want to let a friend down. Encourage your teen to come to you when this happens, because it ultimately will.

Peer Pressure Problem #3: Borrowing Money From Friends

Try to encourage your teen never to borrow from friends. If you can, relate personal stories of how borrowing from friends hasn’t worked out well for you. Make it comfortable for your teens to come to you first, if there is an issue where they need money; however, in reality, they may not.

If your teen is the borrower, make sure they understand that it’s a matter of honor and self-respect to pay the money back. Honor seems like a lofty conversation. Frankly, I think we need more conversations around our values.

What if your teen is borrowing a significant sum? You need to be on top of that and know their cash flow situation. Are they working? Getting money from Grandma and Grandpa? Borrowing from friends? And, yes, any parent’s worst fear, dealing drugs? This is a situation where you need to step in, but you don’t need me to tell you that.

Your family doesn’t have to be rich in order for your teen to get caught up in the “rich-kid syndrome.” They just have to be perceived by their friends as a little more well off – the kid who’s expected to pick up the check. If your teen is the “rich kid” in their crowd, they may feel taken advantage of — or they may like it because it may make them feel important. Either way, it’s an unhealthy situation.

Talk to your teen about their feelings — what they think they have to do, and whether they know how to say no. Help them to design strategies to keep from being put in this situation. Do they encourage it; perhaps even without meaning to, by suggesting that they all go somewhere that their friends won’t really be able to afford? Or is it the other way around? Is there a friend or two in their group who always seems to think it’s a great idea to go to the expensive restaurant when your teen is around? In that case, your teen is not keeping up with the Joneses; their friend is trying to keep up with your teen. Try to empower your offspring to say, “No, let’s do something that we can all afford.”

Everyone grows up with peer pressure. Indeed, that’s why it is aptly named, “pressure.” These pressures are powerful influencers for our kids. But since you are dealing with your teens, have patience when discussing these issues around your values. Don’t be surprised if, as you are having this heart-felt talk, your teen text a friend saying, “My Mom keeps talking to me about ‘keeping up with the Joneses’ and the Joneses are lame. Why would I do that? And by the way, my Mom is lame, too.” Take it to heart; you may have just gotten through!


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