A child's attitude about money or finances is shaped by his parents. Certain money mistakes that moms and dads make might unwittingly be picked up by their kids, which could determine how they handle money as adults.
So, how can parents raise kids who are smart about money and finances? What money mistakes should parents avoid at home to ensure that these don't leave a bad impression on the children?
Most parents usually tell their children that it is impolite to discuss money matters with adults or it is not proper for kids to be asking parents how much they make at work. But according to Forbes, this can be mistake and could be defeatist in the long run.
To cultivate a healthy attitude about money in children, parents need to be open about discussing money matters in the household. It eliminates the possibility of kids learning from other kids or their families, which can lead to misinformation especially if the information they pick up from others go against a parent's beliefs and principles about money.
Parents can start by showing smaller children the household bills to introduce them to concept of the responsibility of paying for utilities and living expenses. For teenagers, orienting them about budget and letting them be involved in grocery purchases could also be good ways to teach them about money matters.
Another money mistake that parents make is in living beyond their means or enabling the children by giving them everything they ask for. Sometimes, especially with kids who have rich friends, it might be tempting for parents to provide them with the material things so that their children won't feel left out.
Financial expert Laura Levine said, via Time, that one or two indulgences might be short solutions. However, this attitude can only lead to financial stress. What parents can do is to give their children a reality check.
Explain the family's financial situation to the children and acknowledge that there are some things your family cannot be practically spending for. Use this as a teaching moment to introduce the concept of saving for big-time purchases.
Do you willingly talk about money matters at home? What other tips do you have for other parents regarding money matters? Sound off in the comments!
