Life would be a lot easier if the teachers in your child’s school taught them about budgeting, taxes and even forms of credit, instead of focusing on the lessons they never needed to learn. Unfortunately, financial classes still aren’t a part of the curriculum, and that means that parents and guardians are the ones left to make sure that their children know how to manage their cash.
The sometimes-shocking truth is that even if you think that you’re not teaching your children anything about money, you’re probably having an impact that you haven’t noticed. Every time you ignore a bill or pay with something you can’t afford using a credit card, your kids are learning from your behavior. Are you teaching them the right lessons?
Bad Lesson 1: Someone Else Will Bail Them Out
Do you give your children a weekly allowance? If so, there’s probably been a few times when they’ve spent all of their money immediately, then regretted it as soon as their friend has invited to them to the movies or asked them to do something that costs money. While it’s tempting to give your kids everything they want, it’s also not great to teach them that if they make a mistake with their money, someone else will come along and give them more. Instead, let them mull over the decisions that they’ve made and learn from their mistakes – no matter how tough it is.
Bad Lesson 2: Bills Can be Put on Hold
If every time you receive a bill in the post, you throw it somewhere else, or let it sit around until the last minute, your kids are going to have a hard time understanding why you can’t just blow off paying for your car insurance one month and buy them a toy instead. Make an effort to show your children that you’re committed to paying crucial expenses on time every month. You can even sit them down with you while you go through the budget so that they can see just how many crucial costs you have to deal with. That way, they’re more likely to understand when you tell them that you don’t have any money left for treats.
Bad Lesson 3: Someone Else Can Pay
Ideally, if you and your spouse live together, you’ll split the living expenses between you, so that you both have some cash left over to spend on yourself. However, if you end up spending all of your cash straight away and start asking your spouse to buy you the things that you want instead, your kids will learn that they just need to get someone else to pay for what they want too. By being responsible with your own money, you teach your children that they’re in charge of their own financial security. This will lead to greater independence in the future.
Bad Lesson 4: Plastic Works when Cash Isn’t Available
Do you frequently turn to your credit card when you don’t have enough money left over? If so, this is teaching your children that they can still get whatever they want whenever they want it, as long as they have a card handy. Your children don’t understand that you’re going to need to pay more money for the convenience of using your credit card later. If your children are too young to understand how things like banking and credit cards work, then it’s best to avoid using credit cards in front of them. If they are old enough to understand, try showing them how your credit card bills add up at the end of the month, and why it’s not a good idea to rely on them for all of your expenses.
Bad Lesson 5: You Don’t Need to Talk about Money
If you’re always reluctant to talk about cash in front of your children, then how can they understand how important it is? While it’s difficult to discuss something as complicated as cash with younger children, it’s a good idea to keep them in the loop as much as you can. The more open you are about money, your expenses, and how much cash you have to spend each month, the easier it will be for them to understand why you need to shop around for the best prices, and why it’s so important to save for the future.
Bad Lesson 6: Impulse Purchases are Fine
Finally, while treating your kids to a last-minute candy bar can seem like a good idea at times, it also teaches them that spending doesn’t have to be planned. Instead, show your children why you can afford to get them that treat. Perhaps you saved a little extra on an item that was on special. That way, your children will see how everything adds up.