Let’s face it. We’re human. We’re going to make mistakes when it comes to raising our kids. However I find the best way to avoid mistaking mistakes is to be aware of them before they happen. In How Not to Teach Kids About Money I explore some of the ways to avoid making some of the worst mistakes a parent can make in regards to teaching their kids about money.
Don’t let kids manage their own money.
Per a study done this year by T. Rowe Price more than half of the parents asked do not give their children an allowance. This is a mistake. As I discussed in Teaching Kids About Money Before They Move Out, having a child manage their own money can provide kids with invaluable, tangible lessons about money that they can carry into their own adult lives. And it is especially important to teach them to manage their own money while they are young so that the mistakes that everyone makes when they are asked to manage their own money for the first time can provide lesser negative consequences than if they make those mistakes when they are older.
Don’t teach kids needs vs. wants.
Teaching kids to ask themselves the question, “What horrible thing will happen if I do not buy this item?”can be an invaluable lesson to learn. It can teach kids how to be grateful for what they have in life, it can teach them how to prioritize different aspects of their lives, and it can help avoid making purchases that prevent them from being able to pay the most important bills in their lives such as bills that take care of their basic needs like room and board.
Teach kids that there are no financial consequences.
We’ve all heard the jokes about the grown man child still living with his mother, but it ceases to be funny when we see more and more young adults unable to move out of their parent’s homes. Sometimes there are bonafide reasons for such living arrangements such as health issues. However, a lot of these people still live with their parents because they have not been taught about financial consequences, and their parents are still not teaching them these lessons. So to avoid being the butt of the man child jokes start teaching your kids about financial consequences when they are young.
Don’t replace gift money that has been lost, make them pay themselves to replace lunch boxes that they keep losing, and let them be the only kid in class who doesn’t get to have money for the school fair because they chose to spend their fair money on something else. Teaching kids financial consequences now can help them to make smarter financial decisions in the future.
Teach kids how to buy love with money.
It’s pretty easy to get caught up in the busyness of life, and lets face it. It takes less time to buy your kid an ice cream that it does to teach them how to make ice cream. But making the overly easy choices of buying your child everything they ask for when they ask for it because you love them is really doing a disservice to your child. You are teaching them that they are only as important as the things that they can buy or own, and you are teaching them nothing about the importance of impulse control. Both of these problems can really destroy an adult’s finances.
Don’t use moments in time as teachable moments about money.
Every time you enter a store, every time your family makes a major purchase, and every time your child asks for a specific item there are perfect teachable opportunities to take. Missing those opportunities are to miss perhaps one of the easiest ways to take the abstract concept of money management into a practical lesson for your child.
One Final Word
I was school supply shopping last week, and I was in my 7th store looking for the ever elusive graph paper. I noticed in the check out line in front of me a family. There were twin girls my son’s age, a boy my daughter’s age, and a mother and father obviously frustrated with each other counting out change to buy their kids the bare minimum of what they would need for school. Now I honestly don’t know what brought those parents to the place in which they were struggling with pennies for the bare minimum, arguing with each other in front of their children about these necessary purchases, but I really felt for their kids. I couldn’t help but think about the lessons about money they were learning in that moment.
I only tell this story because to me exemplifies what can go wrong if you teach this final How Not to Teach Your Kids About Money lesson.
Don’t practice what you preach.
Children are watching what you are doing and a modeling your behavior. Do you have a problem with impulse control and your money? Do you identify your value with the items that you own? Do you focus too much on the now and don’t plan for the future? Odds are that although you may be taking the time to verbally teach them about money, they instead will model your behavior in the future. Taking the time to fix your own issues with money can sometimes be the best step you can take to teach your kids about money properly.
Did you enjoy How Not To Teach Your Kids About Money? Leave me a comment and here are some other articles related to teaching kids about money that you might enjoy.
- Teaching Kids About Money — Before They Move Out
- How To Teach Kids About Money: Guest Post
- Teaching Teens About Money
- The Power of Yes: Teaching Young Kids About Money and Choices
- Kids and Allowance