Kids are always watching their parents, even during unexpected times.
To set a good example for their children, parents must instill values and teach them how to live a healthy and happy life.
Here are some tips to avoid common mistakes…
Mistake 1. Believing your kids must have the same things as other kids
Many parents talk themselves into believing their children should have the same things as their friends or peers.
A solution: Ask yourself: Why am I considering buying this for my children? There is nothing wrong with nice things, but children often do not realize how expensive they are, and how much effort they took to earn them. It can start a cycle of wanting and getting and never being satisfied.
Mistake 2. Shielding your children from cost
Parents might want to reconsider shielding their kids from the harsh realities of money.
A solution : Any activity that involves money and value exchange can be used as a tool for learning. Without an understanding of how money works, kids won’t be able to develop a healthy attitude toward it. For example, showing your children a restaurant bill is one way to explain costs, taxes, and how tips work.
Mistake 3. Using credit cards thoughtlessly
A credit card can pose a financial risk to teens, especially for those who see it as a “magic card ” vs. a valuable financial tool.
A solution: Consider giving kids allowances, so they will be able to make the connection between money and tangible things. They can learn to differentiate wants from needs, and how money is exchanged for items through a budget.
Mistake 4. Spending money on your children without thinking
Do your children constantly ask for money? Are you constantly handing out cash for miscellaneous wants or asks?
A solution : It may be time to discuss the real financial facts of life with your child. You can decide what you think they should earn by doing chores in the home, or work outside of the house, and how this will be budgeted. Explain that you are not a bank and make sure that they understand the rules.
Mistake 5. Intervening when kids are earning and saving for a want
Remember when you were a kid and worked hard to save up for something you really wanted? Having accomplished that probably made you feel proud.
A solution : If your child is earning money and saving to get a special item, instead of intervening and buying it for them, encourage them to reach their goal and celebrate their success.