Pass These Good Financial Management Habits on to Your Children!

Teach your children to adopt good financial management habits and to avoid these negative ones.

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Many parents complain that their children never listen to them.

While that may be true, there is good news.

The good news (and at the same time the bad news) is that your children are always watching.

If you ever tell your kids “Do as I say and not as I do” you know what I may.  Kids are less likely to do what you say, and MUCH more likely to do what they see you do!

The same principle applies when it comes to good financial management habits.

Your children may not listen to you, but they will quickly assimilate your habits and attitudes ( good or bad) regarding money. What habits are you demonstrating that could potentially harm their financial future?

When faced with uncertainty, it’s common to rely on experience. Before you know it, your kids  will be all grown up and may be off to college.  When they are confronted with financial situations, they’re going to imitate and mimic what they know. It’s up to you to set an example that will enhance their financial future.

Most likely, you have not given much thought to what you may be inadvertently teaching your kids about money. Today is a wonderful day to start.

4 Bad Financial habits you may be displaying that could make life more challenging for your kids:

  1.  You use your credit cards unwisely. In my opinion, this is the most devastating financial habit you may be inadvertently teaching your kids. True, credit cards can serve a purpose when you are in a financial jam, but the use of credit to purchase unnecessary items is one of the leading causes of financial stress and bankruptcy.  Don’t pass that negative financial habit on to your kids.
  2. You give in to impulse purchases. Children are already inherently spontaneous and impulsive.  That comes with being a kid.  Don’t let them witness a lack a financial control in you when it comes to money management. Your lack of control in spending money makes self-control even more elusive for your child in the future. Show your children that purchases should be decided ahead of a shopping trip….starting as early as when you sit down to plan your expenses to include in your budget. 
  3. You never stick to your budget.  Having a budget is a good start, but if you never stick to it, you are teaching your children bad financial habits. Sticking to your budget is another important way that you teach your kids financial self-control.  Involve your children in the budgeting process, and then remind them that a budget exists and that certain purchases can’t be made because of the budget. 
  4. You never make a clear distinction between wants and needs.  Teach your kids that needs are to be taken care of first. Wants are only considered after the critical items have been addressed.  Learning and understanding the difference between wants and needs is a valuable lesson your children need to grasp early on in their development.

Ask yourself if you are inadvertently displaying those 4 bad financial habits to your children. Remember: they may not listen to you, but they are always watching you!

While you make an effort to minimize or avoid showing your kids bad habits, make a point to develop and display good financial management habits.  These are the kinds of positive financial habits that can benefit you now while at the same time help your help your children to develop good habits from watching and imitating your good example.

Start displaying and sharing these 4 good financial management habits:

  1. Start saving consistently. Make this a main teaching point by saving money from each paycheck. Encourage your child to do the same with a portion of any money they earn or receive as a gift.  I give my 12-year old adopted niece chores and assignments to do and she can earn income when she completes them.  We then go to the bank together and she gets the “honor” of depositing the earnings to her savings account.  She gets excited each time she makes a deposit and sees her savings grow.  She is learning how to work and save money toward her financial goals. I also show her my savings and how I too am saving toward my financial goals. You can do the same thing with you kids. A robust savings account is an effective solution to many of life’s financial challenges.  It’s one of the valuable lessons you need to teach your kids from a young age.
  2. Start Paying bills on time. Your children know that you have to pay bills every month and they see those bills with the words “Past Due.” They also notice when you avoid the bill collectors that call day and night. And rest assured that they pay attention to the comments you make about the bill collectors and the financial bind you may be facing. What are your actions and comments teaching them?  Start doing your best to pay your bills on time and avoid the late fees. You’ll be setting a great example for your child and giving him a wonderful financial management heritage.
  3. Start teaching them that making great financial strides requires sacrifice. Let your children know that you’re not buying a new car because it’s more important to save for their college or retirement. Give them the option of making a small purchase at the sacrifice of something else. All financial decisions have positive and negative consequences.
  4. Start showing them the rewards of financial responsibility. No one wants to sacrifice all the time. The whole point of sacrificing is to enjoy the end result. Show your children that regularly saving money results in a vacation or a new television. Let your kids see and experience the positive outcome of good financial habits. My niece is saving towards her own vacation shopping funds.  She wants to buy a new cell phone and new clothes.  She’s already made her shopping list, and is eagerly looking forward to enjoying the rewards of her own financial responsibility. …getting everything on her list that she worked so hard and saved up for. 

Are you demonstrating good financial management habits to your children? Are you demonstrating poor habits?

You have a tremendous amount of influence over your child’s financial future. They’re likely to behave in a fashion similar to what they see in you.

Consider what you’re teaching your child each day with your money management habits.

If it’s not good, now is the time to change it and improve your money management skills.  If it’s good.  Congratulations.  You are raising future adults who will have good financial management habits!

Please Share Your Thoughts 

 In the comments below, share with us:

1. What steps are you taking to teach your children financial responsibility?
2. Do you have any tips to share that have worked well in your family?


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