Mistakes Parents make with Kids and Money

Eight Common Mistakes Parents Make with Kids and Money

Little changes in what we do, say and expect will make the difference between our kid’s financial success and failure.
No one will have your child’s best interest at hand, as you will when it comes to money matters.
Be careful what you teach it can come back to haunt you forever!

1. Not talking to your kids about Money.

Money beliefs and habits start extremely young. Every chance you get, talk about how money is earned,
why you buy certain items and not others, and help your child understand how money works in the world.
Instill good money habits in your children even before they fully understand them, and they will adopt and live
by these habits for the rest of their lives.

2. Talking negatively when it comes to money.

Have you ever said to your child/or been told, that’s too expensive, what do you think money grows on trees, we can’t afford that,
I’m not made of money. Even though this may be true, this will set a negative tone around money for your kids.
Instead say to your child, it is not in the budget this week, but if you would like to find a way to earn the money for it I will help you.
This will show your child even though they cannot have it right now from you, they can figure out a way to attain it themselves.

3. Giving kid’s money for nothing.

Giving children money or an allowance for nothing can be harmful. “Free” allowance creates an attitude of
entitlement (you owe me) that will last a lifetime. Money is earned and the sooner our children understand this
concept the better. When someone gets something for nothing, they don’t appreciate it as much as when they earned it.
Your child will spend their money wiser than your money.

4. Starting the paycheck-to-paycheck syndrome.

If a five-year old child takes a dollar and spends a dollar, the child will do the same at ten, at fifteen, and then at twenty.
The habit of spending it all will stay with your children into adulthood, and they will grow up to live paycheck to paycheck.
If you make a million and spend a million, you are still poor. Being wealthy has nothing to do with how much you make.
It’s how much you keep! Instill the habit of giving, paying your self-first and living within your means, starting with a dollar.

5. Not starting a savings account early. Most people of retirement age have little or no money of their own to live on after retirement.
A savings account puts your child’s money out of site and will be there in the future for emergencies or retirement.
Many children and adults feel that when they save money, they will have less. But this is a crazy idea because when you save money,
you actually have more! “Save your money” really means: “Pay yourself first!”

6. Creating lifestyles kids cannot afford. Children have missed learning how to want for things, earn things and overcome
obstacles to get what they want. Many parents are providing lifestyles to their children that they simply cannot afford.
The boomerang effect – grown children moving back in with their parents – has a lot to do with the inflated expectations
children have about their lives when they leave home. They can’t afford the lifestyle their parents gave them at home,
what do they do? They turn to credit cards to fund the only lifestyle they know. Parents are spending way too much
money on their kids and unwittingly setting their children up for failure.

7. Not teaching a work ethic. Work ethic is not an inherited trait. We must teach our children how
to work for the things they want in life, whether it’s a toy, a position in sports, or a job interview.
The sooner you can teach children a work ethic, the better. Whether your children work at a job or decide to have
their own businesses, their work ethic will play a huge part in their success or failure in either situation.
Teaching children to give 100%, 100% of the time will pay off in all they do throughout their lives.

8. Not teaching kids the power of investing and compound interest Investing is an extremely powerful concept for kids.
They have a gift that we, as adults, have lost, and that is the gift of time, which allows for compound interest and little amounts
of money invested regularly to grow over time. When you teach your children to Invest, you teach them how to build financial wealth.
Check out the power of investing!
Plus, the sooner you teach your children about retirement, the faster they will get there. Research shows you can become a millionaire
on the minimum wage, but what they forgot to mention is that you must start investing when you’re young in order to accomplish it!
It has never been more important than it is today to teach your child the habits of saving and investing, because Social Security,
company retirement plans, and the government is putting more and more responsibility on the individual.

Bad money habits are reversible and the sooner you make the decision to teach
your children positive money management the less it will cost you now and in the future.