On 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.
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.
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.
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 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.
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!
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.
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.
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.
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.
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.
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?
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SHANNON RYAN, CFP®
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?