Lending Club Blog

Spare the Rod (and the Designer Jeans Too)

The troubled economy has been hurting many families for quite some time, though the effects are starting to be felt by a new group of people: teenagers. Many parents, who have always been the major funding source for their kids’ spending, have started saying “no” out of financial necessity.

The New York Times detailed this trend in The Frugal Teenager, Ready or Not. The article cites a survey that found “discretionary spending by teenagers, whose money comes from allowance, gifts and part-time jobs, had dropped 27 percent to $2,600, from its spring 2006 peak of $3,560.” While a portion of this may be attributed to cutbacks in part-time positions by struggling retailers, reduced handouts from Mom and Dad are likely a key factor as well.

Children asked to cut back on their spending responded in a number of different ways, but disbelief about the reality of family finances seemed to be the most common. One woman found her children more receptive to cutbacks after showing them specifics of their household expenses. It would seem that for all their confidence on the subject of money, few teenagers realize the actual costs of running a household. What’s more, parents who themselves are novices in personal finance have little hope of adequately teaching the subject to their children.

It’s not surprising for children who have always gotten what they wanted to be confused by difficult times. In many cases it’s more likely the parent’s fault for having always said yes. Regardless of where the blame lies, it is difficult to find a solution to this case, if one even exists.

As more children become affected, the problem may moderate itself to some degree. Frugality and thrift could become trendy as more children engage in the practice out of necessity. That, along with an increased awareness of financial constraints and learning to decide between multiple wants could be a real positive outcome of this whole mess. Whether you’ve always given your children just what they’ve needed, everything they wanted, or some combination of the two, now is an excellent time to further their financial education. You’ll likely learn something along the way as well.

Have you recently had to curtail your children’s spending? How did they react?

Saturday, November 29th, 2008 at 3:53 pm

Comments (0)

Recommended

5 Ways to Get Your Finances Ready for the Holidays

How to Build a Budget: Part 1

The State of Debt: 2016

Types of Loans 101

See more
Lending Club Awards
  • Archives z

Recent Posts

5 Ways to Get Your Finances Ready for the Holidays

Read More »
December 1, 2016

How to Build a Budget: Part 1

Living on a budget. It can sound scary, right?… Read More »
November 21, 2016

Five Signs Your Business Needs Capital

Knowing when your business needs working capital— and promptly… Read More »
November 10, 2016

How does a car refinance loan work?

Whether your goal is to lower your monthly car… Read More »
November 2, 2016

Are you paying too much for your auto loan?

How refinancing your auto loan with a better rate… Read More »
October 25, 2016

The State of Debt: 2016

Politics can be a divisive topic, where issues and… Read More »
October 24, 2016

Lending Club Teams Up with United MileagePlus® to Offer Customers More

  When it comes to… Read More »
October 21, 2016

Patrick Dunne: A Message to Investors

I wanted to take a moment to introduce myself… Read More »
September 29, 2016

Line of Credit vs. Loan

Lines of credit (LOCs) and small business term loans… Read More »
September 28, 2016

Types of Loans 101

There are many types of loans out there and… Read More »
September 16, 2016

2014

We went public today!

Ringing the bell this morning at the New York… Read More »
December 11, 2014

New and Improved Statistics Page

We recently redesigned our Loan Statistics page to make… Read More »
November 13, 2014

Lending Club Honored with Economist Innovation Award

This month I was honored… Read More »
October 15, 2014

Welcome Vermont Investors!

Today, we’re thrilled to welcome residents of the state… Read More »
September 4, 2014

We filed to go public today

We filed a registration statement with the SEC today… Read More »
August 27, 2014

Our Billion Dollar Quarter

We’re excited to announce  that we’ve facilitated over $5… Read More »
July 8, 2014

Is Lending Club Available in My State?

Is Lending Club available in my state? That is… Read More »
July 7, 2014

Lending Club Joins Senator Cory Booker to Discuss Improving Access to Capital for Small Businesses

Read More »
June 20, 2014

Lending Club Named a CNBC Top 50 Disruptor for a Second Year

For the second year in… Read More »
June 17, 2014

PRIME is now Automated Investing

Lending Club is excited to announce that PRIME has… Read More »
May 14, 2014
View All w