You hear a lot about things you shouldn’t let your kids do when you’re a parent, like watch too much television, eat too much sugar and leave their rooms a mess.
But what about the things that parents shouldn’t do? When it comes to raising financially savvy kids, as it turns out the secret may be just as much in what you do and say yourself as what you actually teach your kids.
Here are three things you should never let your kid hear you say when it comes to money, and why.
You say: “We don’t need a budget, we’re careful spenders.”
They hear: “There’s no real value to things we buy, so we can spend what we like.”
What you really want your kids to learn: Most experts will tell you that the number one way to be smart about money is to develop and stick to a smart budget. By telling your kids that your family operates outside of that concept, you’re teaching them to disassociate with the idea of purchasing goods for a specific cost, and that the money you spend comes out of the money you earn. The mechanics of budgeting aren’t necessarily difficult, but the earlier you can teach them to your child, the more likely he will be to use a budget in his own financial future. To that end, it’s a good idea to include your kids in your financial planning (once you figure out a budget, of course — or better yet, sit down with your kids and figure out the family budget together), and use an allowance as a tool to teach them about saving and spending. (Check out this piece for more on allowances.)
You say: “Sure we have some debt, but it’s no big deal.”
They hear: “Debt is not really something to worry about.”
What you really want your kids to learn: The truth is, many adults might not even be 100% sure how their credit cards and debt works, so that’s the start of the problem. Of course we don’t want to scare our kids, but it’s important for them to understand as they’re growing up how credit cards work, and that there are actually different kinds of debt. Instead of ignoring the problem, sit down with your child and explain the different types of debts your family has (a mortgage, student loans, cars and credit cards, for example), along with how credit cards work. A child who understands fully what it means to be a responsible credit card holder is one who will be less likely to overspend and get into trouble in the future.
You say: “ …” [or nothing at all]
They hear: “It’s bad to talk about money, so don’t do it.”
What you really want your kids to learn: Kids who grow up in a house where talking about money is taboo may grow up to think being financially savvy is somewhat of a no-no. As your kids grow it will be important that they discuss finances to help them in their careers, with friendships and as they enter relationships and maybe even get married in the future. What we should really be teaching our kids is that it’s okay to ask questions and talk about money, because doing so helps keep everyone on the same page and makes us all just a little bit smarter about our finances in general.
Of course the earlier you can start talking to your kids about money, the better, but it’s never really too late, and the last thing you want to do is lie. (Need proof? Check out this piece.) As an added bonus, coming to grips with your own financial situation so that you can present an educated front for your children will help you in the long run, as well. After all, if you feel uncomfortable chatting with your kids about money now, just imagine how you would feel years from now if your adult child had to help pull you out of debt, the way this blogger did with her parents.
If that’s not motivation to get the conversation started, we’re not sure what is.
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