4 Parenting Mistakes to Avoid When Teaching Kids About Money
No matter how well you manage your money, you want your kids to grow up making all the right financial decisions. But if they see you overspending, they might adopt your poor money habits without you realizing it.
Some parenting fails teach children about money — in a bad way. Rather than your kids learning from your mistakes, they might be destined to make the same ones you’re making right now. Here are some parenting fails to avoid when teaching your kids about money.
Making impulse buys
Every parent has probably had their child ask for a candy bar or other treat while waiting in the checkout line. Telling them no can be difficult, but it beats raising a child who thinks they’re entitled to everything they see.
Occasional impulse purchases are fine. Getting an ice cream cone after a tough week at school, or going to see a movie after getting a high test grade can be worthwhile motivators for kids to do better in school. But if you spend too much on an impulse buy — such as the latest tech gadget — it can show a lack of restraint in how you shop.
Even small impulse buys, if made often, can show your child that it’s OK to buy something without giving it much thought. Small purchases add up, and a better lesson would be to put that money aside in a vacation fund for the whole family to enjoy.
Not letting them work for their money
Giving a kid an allowance is a great idea, as long as they work for it. Handing over cash each week without them doing anything to earn it can make you seem like a free ATM. Money doesn’t just appear in your pocket magically. You work for it, and so should they.
Be it earning money with chores or a part-time job, kids can learn the value of a dollar and find out firsthand how many hours of work it takes to afford that pricey pair of sneakers they want.
Not giving them their own bank account
If your kids don’t have a savings account or college savings account by age five, you’re doing them a disservice. Heck, if you don’t have a savings account or retirement account, you’re doing yourself a disservice, while also teaching them the poor habit of not saving for the future.
As children become teenagers, parents can teach them about managing money by helping them get an ATM or debit card, a checking account, and possibly a credit card with a low limit.
Birthday money and a percentage of their allowance can be put into their savings accounts. Regular trips to the bank to make those deposits also show them how banks work and why they should save.
Having terrible money habits yourself
You don’t have to detail every expense in your budget with your children, but they should have a general sense of what you’re budgeting for and why. Sharing this info will teach them how to set their own money goals, and how to manage monthly bills before they’re responsible for paying them.
If you pay your bills late and constantly complain about how you can’t afford the gas bill each month, you’re setting a poor example of how to budget for basic expenses. Your kids are watching you, so you should be leading by example.