Money management for teens
Chapter 6: Let’s talk about money
HOW DO you feel whenever you talk to someone about anything related to money?
Money is one of the most difficult topics to talk about with other people because it is a very private issue.
Few people want others to know the amount of money they have—or don’t have. People also get emotional about money, which can make financial negotiations difficult. Yet, financial negotiations are a regular part of life.
You sometimes want things like clothes, music, shoes or sports equipment that you cannot afford. Most teenagers feel as though they have no say in money issues at home. In some families, teens often argue with their parents over money—the amount they can have and what they are allowed to spend it on.
Negotiating about money
Asking your parents for money, bargaining for things at the market, or discussing with friends about who will pay for what are all examples of financial negotiations.
To negotiate is to communicate with others for the purpose of reaching agreement. It is a skill that you can learn.
Negotiations can result in different outcomes. In a win-win outcome, both sides get something they want or need. Both will then be willing to negotiate again. Let’s say you want to convince your parents to let you go out with your friends on Friday night. They agree only on condition that you stay home and look after your younger brother on Saturday. You get something you want, and your parents do too.
In a win-lose or lose-win situation one participant gets what she/he wants and the other gets nothing. When this happens, the loser is less likely to want to negotiate with the winner again. Example: You want your sister to do your dishwashing chores after supper because you want to go out with your friends. Your sister says she’ll only do it if you pay her. You grab her cell phone and say she can only get it back if she agrees to do the dishes.
In a lose-lose outcome, the two parties cannot come to an agreement and end up with neither party getting anything. The customer who leaves after bargaining unsuccessfully with a store owner on the price of an item ends up not buying anything and the store owner, not selling anything.
Successful negotiations start with good communication skills (see Chart 1). Communicate with confidence. Explain what you want clearly and listen to the other side. Try to keep calm as you look for a compromise that will satisfy everyone involved.
In “A Conversation between a Father and a Daughter” (see Chart 2), the daughter uses communication skills from the DO and DON’T chart. She shows her father respect, avoids an argument with him and proposes a compromise.
With these skills and a little preparation, you can often negotiate your way to a win-win.
The more you practice your negotiation skills, the better prepared you’ll be for life after high school.
The real winners in life are the people who look at every situation with an expectation that they can make it work or make it better.
Protecting your money
By now, you have learned about earning, saving, spending and borrowing money. You know the differences between needs and wants. You can do a simple budget for yourself. You should also be able to do comparison shopping, and make good decisions about which product is the best buy.
How else can you best protect the money you or your parents have worked so hard to earn?
You can learn to be an educated consumer, one who knows how to discern truth in advertising, as well as make complaints about products and services when necessary.
A consumer is anyone who buys and uses a product. You may be a young consumer, but you are a major target for companies and their marketing schemes. Some ads will entice you to buy by saying the product is used by someone who is really successful. This is why boxing champ Manny Pacquiao is making more millions from endorsing everything from videoke microphones to socks.
There are ads that give misleading information about a product or a service. They lead you to think, for instance, that children who drink this brand of milk will be super smart.
Beware also of advertising that promises instant beautiful skin, miracle cures or get-rich-quick schemes. If the promise is too good to be true, most of the time, it is a half-truth or downright lie.
Consumer action
If the adults in your family and community are too timid to assert their rights as consumers, don’t be. There are laws that protect consumers from problems relating to the purchase and use of goods and services.
Among the most common problems include unsatisfactory quality of products, goods or services that are defective, late delivery, wrong pricing and being billed for items not received.
Here are the steps that you can take to resolve any problem with a product or service that you’ve paid for:
Return the item to the store, or go back to where you availed of the service.
Talk the person who sold you the product or performed the service.
Clearly and calmly explain the problem.
Tell them what you would like them to do (replace, repair again or return your money).
Give them time to find a solution to the problem.
Talk with the supervisor or manager, if necessary.
Keep all receipts, repair orders, warranties, cancelled checks, contracts and written records of your complaint.
Present the problem to the appropriate person who can deal with it. If your complaint is ignored or the solution offered is unsatisfactory to you, talk to someone in a higher position.
You may also contact the Consumer Welfare Division under the Bureau of Trade Regulation and Consumer Protection at the Department of Trade and Industry. As a last resort, you can always file a case against the company.
You should complain as soon as you find the defect in the product or the service, or as soon as possible. Complain in writing (see Chart 3), or have it recorded at the customer service of the store or the company. Keep your cool. Dealing with the store or company employees in anger can cloud your thinking.
Besides consumer vigilance, there are many other skills that you have to learn to help you succeed with money. But right now you can start with what you already know— budget, spend carefully and save regularly. Don’t forget to share some of your money (there will always be someone needier than you).
Putting smart financial habits into practice now will serve you well throughout your life.
( Adapted by Chelo Banal-Formoso from Global Financial Education Program: Young People: Your Future, Your Money. Copyright ©2008 Microfinance Opportunities and Freedom from Hunger. )
