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Mistakes Parents Teach Kids About Money
You try to teach your children all kinds of lessons, from how to ride a bike or fly a kite to how to recover from a broken heart. But when it comes to money, you might be teaching your children the wrong lessons. Forbes.com recently listed 10 common mistakes parents make when teaching their children about money:
1. Not saying anything at all. While you probably talk to your children about all kind of things, from politics to religion to sex, do you talk to them about money? Many parents don’t, and some even treat money talk as rude or inappropriate. But you should talk to your children about money in an age-appropriate way. With young children, explain that when you go to work, you earn money to buy the things your family needs. As they get older, expand your conversation to include things like the relative value of purchases, the need to save for things you want, why you pay taxes, etc. In other words, make money a natural topic of conversation.
2. Not explaining credit cards. When you use a credit card in front of your children, be sure to explain to them that you have to pay for the purchase with real money when the bill comes. Avoid giving them the impression that you can use credit to pay for things you can’t really afford. Explain about things like credit card interest rates, late payments and the effect that using credit irresponsibly can have on your ability to borrow money when you really need it.
3. Never saying no. Don’t give your children everything they ask for. Set up rules for granting requests, and establish a budget. Then stick to it, and explain to your children why they cannot have everything they want. Children who are allowed to feel entitled grow up to be adults who feel the same way – often with disastrous financial results.
4. Including your children in lies about money. Did you ever tell your children not to tell your spouse about a purchase you made? That teaches children to be dishonest about handling money.
5. Not practicing what you preach. It is great to tell your children that it is important to save money or to stick to a budget or to give to charity. But if you don’t actually do those things, that is the lesson they will take away. Remember, actions speak louder than words.
6. Equating money with fun. The lavish, expensive vacation is fine if you can afford it. But make sure your quality time together includes playing games at home or other things that don’t cost a lot. You want your children to realize that the important thing is spending time together.
7. Not saving. You try to teach your children to save for a rainy day. But if your children see you worrying about not having enough money for things like emergency home repairs, college or retirement, they know you did not follow your own advice.
8. Exposing your kids to money tension. Children are quick to pick up on disturbances in their home. If you and your spouse are always worried about money, especially if you argue about it, you can make your children worried too. And that worry can carry over into adulthood.
9. Giving allowances with no rules. You should set up rules about what your children need to do to receive their allowance, and also about what they need to pay for out of their allowance. Then stick to those rules.
10. Determining money responsibilities by gender. In most families, money responsibilities are like other responsibilities – they are based on the interests, skills and time of the people involved. It’s fine if Dad always does the banking and Mom always pays the bills. Just explain to your children that the division of labor has nothing to do with gender.