Children and Money

10 Money Mistakes Parents Make with Their Kids

10 Money Mistakes Parents Make with Their Kids | www.TheHeavyPurse.comOn Monday, I shared 10 Money Do’s to Raising Financially Confident Kids and today we’re going to examine some money don’ts or money mistakes. These are common stumbling blocks for many parents but don’t let them prevent you from talking to your kids about money. Turning your money don’ts into do’s can help your kids build a happy and healthy relationship with money.

Are You Guilty of These 10 Money Don’ts?

Don’t feel bad if some of these mistakes sound a little too familiar to you. The good news is that all of them are correctable.

Money Don’t: Worry that You Are Robbing Your Kids of Their Childhood

A popular myth is that money is a grown-up concern and teaching kids about money robs them of their childhood. This is simply not true. Whether you talk to them openly about money or not, they are still learning by watching how you handle your money, through both your words and actions.

You may think you’re hiding your financial woes, but it’s unlikely. Most kids can sense the tension or overhear your arguments. And when money is taboo, all they can do is worry in silence. Being open about money — both good and bad — is your best solution because understanding the situation reduces fear while not knowing let’s their imagination conjure up all sorts of crazy scenarios. Now they know Mom and Dad have the problem under control.

Money Don’t: Ask Your Children to Keep Money Secrets

The famous “Don’t tell Mom or Dad I bought this” line may seem innocuous but upon closer inspection, you’re just teaching your kids that money secrets are okay and asking them to lie on your behalf. Of course, if you are buying a present that is a different story, but tell them “why” they can’t tell Mom or Dad what you bought. The “why” matters.

Money Don’t: Adopt an “I Deserve It” Mindset

Money is emotional and we often use it to satisfy feelings of boredom, anger, frustration, sadness and yes, even happiness. It is easy to let our emotions control our spending habits and say “we deserve it” after a bad or good day. So the next time you are tempted to say, “I deserve it” in front of your kids, remember your goals instead and show your kids how good it feels to honor them.

Money Don’t: Ignore Teachable Moments

Kids have mastered the art of fake listening when it comes to being lectured, so rather than lecture your kids about money, look for teachable moments instead. They are a bit like sneaking veggies into meals; kids don’t even realize they are learning. Yes, this means certain tasks will take longer but it’s worth it. Have your kids keep track of the money you save from using coupons and talk about the things you can do with the saved money instead. If you throw out spoiled food, talk to them about how much that food cost and again what other things you could have done with it instead. Teachable moments are all around you — use them!

Money Don’t: Give Your Kids Everything They Want

Many parents believe that in order to be a good parent today that you must say “yes” to everything your children wants. Often times, this just creates entitled kids who expect everything handed to them. They face a harsh reality when they leave home and have to earn their place in this world. In some instances, they continue to expect Mom and Dad to continue to fund their life. This isn’t what I want for my girls and I doubt this is what you want for your kids. There is nothing wrong with buying your child the occasional surprise gift, but it needs to be on your terms, not theirs.

Money Don’t: Focus On What You Lack or Play Keep Up

There is always going to be someone with a bigger bank account, fancier car or nicer home than you. Stop comparing yourself to everyone else. This will help reduce those “keep up” urges which cause so many people to spend money to impress others, even on things that mean little to them. When you always see what you don’t have, than it’s very hard to see your many blessings. You only see scarcity or lack. It’s a habit your kids will mimic and an overall unhappy way to live.

Money Don’t: Forget to Set New Goals

Goal-setting is not a one-and-done kind of thing. It something you need to do continually and it shouldn’t feel burdensome. It should feel fun and exciting because you are creating the life you want for yourself and your family.

Money Don’t: Beat Yourself Up Over Past Money Mistakes

Treat them like spilled milk. It’s already been spilled, so why cry now? Focus on the clean-up and what you need to do to move forward. Don’t let your past mistakes define who you are. They don’t. Show your kids you can recover from money mistakes and still thrive.

Money Don’t: Give Kids Money on Demand

I see this pretty regularly. Parents hand out $10 or $20 bills on demand. Or kids receive an allowance for doing nothing or still get paid even when the chores aren’t completed satisfactorily. Doing this only makes it harder for you to cut the financial cord and harder for kids too. Do yourself, your kids and their future employer a huge favor and help them find a way to earn money and be paid for doing a good job.

Money Don’t: Believe You Need to Know All the Answers

Many parents want to talk to their kids about money but don’t know where to start or feel prepared to be the teacher. And that’s okay. You don’t need to know all the answers now. The greater mistake is waiting and letting your child’s money habits and beliefs cement further and take longer to undo. Many money conversations are just explaining the things you already do and why. The rest you can figure out together.

Have you been guilty of any of these money don’ts? How did you go from a don’t to a do?

Shannon

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Comments

  1. Wednesday, July 23rd, 2014
    The other day my daughter was to go shopping with her friend which we was staying with overnight as we went to a wedding. I felt bad for leaving her, so I gave her extra money so she would have a good time shopping. I've been second guessing my decision ever since......wondering exactly what that was teaching her. I wish my boss would just had me extra money sometimes, but it never happens.... :)
    • Shannon Ryan
      Wednesday, July 23rd, 2014
      Parental guilt gets every single one of us, Travis. :) Sometimes we succumb to it when they are not even guilting us. The good news is that you do this because you are a loving father who is increasingly aware that he does not need to handout money to show his love. I wish I had money handed to me too, sadly it never happens!
  2. Wednesday, July 23rd, 2014
    I definitely worry about being too tired or overwhelmed in the moment to take the time to teach and implement some of the important money lessons, leading to entitlement, I deserve, etc in my children. (And I don't even have children yet!)
    • Shannon Ryan
      Wednesday, July 23rd, 2014
      The fact that you worry about it, Stefanie, tells me that you will take advantage of those teachable moments when you have kids. And the more often you do it, it becomes second-nature and far less time-consuming too.
  3. Wednesday, July 23rd, 2014
    This is a great list Shannon! I think the teachable moment one can be an easy one to overlook and one I've been guilty of at times. It's so easy to let things slide by or say that you're going to deal with it later, but that misses the point altogether. Children, especially younger ones, are such concrete thinkers that you need to take advantage of the moment.
    • Shannon Ryan
      Wednesday, July 23rd, 2014
      We've all been guilty of saying "we'll deal with later or when they get older". :) Like you said, young children are such concrete thinkers and have no money hang-ups when they are very small, that we miss a huge opportunity to shape how they view money from the get-go.
  4. Wednesday, July 23rd, 2014
    You write such great posts! I really think that it is important not to beat yourself up over past money mistakes too, lord knows I've made enough of them, and that this is something really important to let the kids know too!
    • Shannon Ryan
      Wednesday, July 23rd, 2014
      Thanks, Brad! I agree, everyone makes money mistakes and while we need to learn from them, we don't need to beat ourselves up over them. Or think they made us "bad". Mistakes only hold us back if we allow them to do so.
  5. Wednesday, July 23rd, 2014
    I think that parents frequently miss teaching moments with their kids and kids learn best when they are in the moment rather than after the fact. If my son comes home from a friend's house and makes a comment about the size of his friend's home, I immediately start talking about choices and what we value as a family vs. his friend's parents. For a while, every time he asked for money, I had a lecture about why I wasn't giving it to him. We have now gotten to the point where he does not ask for things, but knows that he should suggest using his own money first. If you take advantage enough of the teaching lessons, they eventually sink in. :-)
    • Shannon Ryan
      Wednesday, July 23rd, 2014
      I agree, Shannon. In the moment is the best way to teach them, because now you're dialoguing with them versus lecturing. And let's face it - nobody likes to be lectured! :) I do the same thing and it helps give the girls perspective and understand the choices their Mom and Dad made. And life is made up of the choices we make every day. Isn't it great when your children get it? The girls rarely get the "I wants" these days. Now days they ask me for more ways to earn money, which I love!
  6. Wednesday, July 23rd, 2014
    My absolute favorite on this list is do not ask your kids to keep money secrets. Part of trust is having transparency and being honest. If you're asking your kids to keep money secrets, you're neither being transparent nor being honest. In my family, this was a huge problem. At one point, I decided I would no longer keep money secrets and informed my family that they should no longer ask me. They agreed and it has made me much happier.
    • Shannon Ryan
      Wednesday, July 23rd, 2014
      Good for you, Natalie! I agree money should be transparent within the family. Keeping secrets always does more damage than good, even though so many people think otherwise. It may be cliche but there is a reason why honesty is the best policy! I'm glad you stuck to your guns and told your family that you would no longer keep money secrets.
  7. Wednesday, July 23rd, 2014
    Excellent tips Shannon! I wonder if many parents think that doing these are too difficult to time consuming so they don't even bother to try. But as you said in your interview with Dino and the guys, parents need to keep things simple. Your children want to learn the basics. As you mentioned, they do not need sit down lectures. They just need simple yet intentional chats about how money works. And always lead by example, because as you mentioned, they do see everything you do.
    • Shannon Ryan
      Wednesday, July 23rd, 2014
      Sadly, I think you are spot on. They think it's time consuming and we all have such busy lives these days. Some mean to get to eventually, but eventually never happens. Parents do need to keep it simple. There is again that natural assumption that this needs to be hard and it couldn't be simpler. I've always believe the best way to teach something is to demonstrate the behavior and by doing so, I not only teach my girls, it also help me not get side-tracked or make emotional decisions too.
    • Thursday, July 24th, 2014
      I was just thinking too, about the lead by example, and how some parents do not realize how much their kids really watch them and hear everything that is said around them. It reminds me of when my niece was about 3. She would take all of her dolls and stuffed animals into the family room and set them up on the floor as if they were all having a meeting. Then you could hear her rein-act conversations, both good and bad, that had happened between her parents, about anything and everything. It was very interesting to watch and a true eye opener.
    • Shannon Ryan
      Thursday, July 24th, 2014
      Great example, Sicorra! It amazes me sometimes what Lauren and Taylor mimic, and it constantly reminds me that not only do I need to lead by example, but I need to very mindful of the things I say and do. They do notice and when you least expect, they will repeat what they have seen, whether it was something you wanted them to learn or not.
  8. Wednesday, July 23rd, 2014
    Ugh. I still struggle with number 8. Working on it, but still have a ways to go. Great post, Shannon. :-)
    • Shannon Ryan
      Wednesday, July 23rd, 2014
      Thanks, Laurie! I know it's tough not to beat yourself up over your past mistakes, but as I told you before - you and Rick has made such tremendous strides. Not only in reducing your debt, but changing how you think about and use your money. So while there are choices you made in the past that you may regret, be proud of how you're moving forward and what you are now teaching your kids.
  9. Wednesday, July 23rd, 2014
    Love this article! Money was such a taboo topic in my house when I was growing up; my parents were so secretive about it. I know it's a generational thing, but they certainly didn't do me any favours!

    I totally agree that it's never too early to start teaching our children to save them from having to learn the hard way (like I did).

    Your list is awesome because it really focuses on habits and attitudes towards money, which is half the battle, right?
    • Shannon Ryan
      Wednesday, July 23rd, 2014
      Thanks, Tania! Money is taboo is so many homes, even today, although more and more people are recognizing that not talking about money is doing more harm than good. It seems like in most situations in order for things to "stick", you have to change your attitude and habits first. And money is very emotional, which not everyone realizes. But once you master (or least are aware of them) your money emotions, it's much easier to make good money decisions.
  10. Wednesday, July 23rd, 2014
    I love the point about teachable lessons. I have seen several missed opportunities with some friends of mine with their children. I've asked them about it and they shrug knowingly but would say that the kids won't really absorb anything of consequence. I completely disagree with that mindset because our money habits are in part learned from our parents' attitude towards money.
    • Shannon Ryan
      Wednesday, July 23rd, 2014
      You got it, Kassandra! A great deal of our money habits are formed from watching our parents, including their attitude towards money. I know so many parents don't realize how carefully their kids observe them or their influence on their kids' future money habits and beliefs, but we play a significant role. And we don't give kids enough credit but they absorb far more than we give them credit for. I see it every day with my girls. Things I don't think they understand or "hear", they prove to me later that they absolutely grasped the concept.
  11. Thursday, July 24th, 2014
    Teachable moments are so important. I think most kids get tired of their parents lecturing them and parents start sounding like a broken record. But when they experience something first hand, I think those lessons probably make a bigger impact.
    • Shannon Ryan
      Thursday, July 24th, 2014
      I agree, Andrew. Kids do get tired of being lectured but love actually talking about something in the moment. Having their opinion be asked and considered. They feel heard and pay more attention to what you're saying, rather than nodding their head and drifting off.
  12. Thursday, July 24th, 2014
    Great list, Shannon! I did used to think that kids are too young to think about money, but have definitely had a change of heart the more I learn about personal finance. We definitely want to teach out soon-to-be little one about not only earning money, but what to do with that once you earn it (i.e., not spend every penny like I used to do!).
    • Shannon Ryan
      Thursday, July 24th, 2014
      Thanks, Anna! Trust me, lots of people are initially skeptical when I suggest money talks need to start when kids are toddlers. And while they don't comprehend a ton at that age, they do mimic what they see and hear. And they are also very sensitive to emotions. So they may not even understand why money makes them scared, angry or feel guilty when they are adults, but most likely those were the prevalent money emotions they felt growing up. And I know you will do a great job with your little one when it comes to not only teaching him four quarters equal dollar but also how he should use that dollar too. :)
  13. Friday, July 25th, 2014
    Before, when I haven't started reading PF blogs, I never think that I should start teaching my daughter about being financially responsible. I always bought everything she wanted, but now I know how to say no to her and I explained it to her that we can't buy anything she wants.
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
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