A lot of parenting is about setting a good example. In teaching children how to deal with money, how you talk to them at a young age about it can help them in the long run.
Parents can also go the other way by teaching their kids bad financial habits.
Here are some money issues parents should avoid so that their children aren’t sent down the path toward money problems later in life.
Giving Them Everything It’s common sense not to spoil children, but parents often do because they can afford to—and because they want to give their children the best of everything. This can lead to a misunderstanding of how choices are made with money when they start earning incomes of their own.
Cars, vacations, education and houses are some of the biggest expenses that parents can help their children afford. For young children, it can be too much to say “yes” to every request they make. Instead, focus on giving your time and explain why you have to say “no” to some requests.
Excluding Them From Big Decisions Money lessons come up daily or weekly—consider a trip to the grocery store for an easy one—but even big family expenses, such as buying a car or planning a family vacation, can be lessons in the value of a dollar.
Vacation planning can be a fun way to get children involved and allow them to work within a budget. Determining where you’ll go, if you’ll drive or fly and what activities you’ll do while on vacation can be a deep lesson in how much things cost.
Paying for Everything If your child doesn’t have a job, it can be unreasonable to expect them to buy their own clothes, for instance. But once they start high school, most children should be able to find some type of part-time work so that they have the funds to pay for things like car insurance or a cellphone plan.
If parents pay for everything their child has, it can leave the child without “skin in the game” and a chance to have a stake in what they want.
Forgetting Money Basics Even if your child is taking a personal finance class at school, you should be talking to them about credit cards, interest rates on loans, debit cards and how to save for college, among other basics of financial life.
If you don’t know where to start, begin by seeking help at your local library, community college or bank. Helping your children become financially literate is a great way to set them on the path to financial success.
This article is intended for informational purposes only and should not be construed as professional advice.