Parents teach us a lot of things and how to handle our finances is one of them. However, not all money lessons from our parents are good, and we should accept this as a fact. The good news is that we can learn a lot from poor financial decisions and lessons, and there are many ways to fix them.
1| Fighting Over Money in Front of Children
By fighting over money in front of your children, you are setting a bad example for your kid. There is a chance that the child will grow up believing that it’s a normal thing to do and have trouble with handling his finances.
To fix this, try having a rational discussion about money issues and financial problems without turning the whole thing into a fight. The idea here is to teach the child that compromises are always possible and finding a good financial solution doesn’t have to be that difficult.
2| Saving Money Is Not That Important
Developing a habit that saving money is not that important is not the road you wish to take. In addition, saving money just so you could go on vacation or buy expensive presents is not a wise financial decision.
Instead of spending your hard-earned cash, put some of it aside as emergency money. These funds in your savings account are only to be used for emergencies like medical expenses. For example, if you lose your job, having a savings account will definitely come in handy. Getting rid of your bad spending habits and starting to save up for the future will help you lead a stress-free life.
3| Talking About Money in the House Is Not Needed
Every child needs to learn about money and financial decisions while growing up. If there is no talk about money in the house, the kid will grow up without having a clue how to deal and manage finances.
If you want a child to be financially literate, you should always have an open discussions about investments, debts, and tips for creating a realistic college budget. Giving valuable lessons on how to establish credit, plan for the future, and avoid debt is recommended.
4| Making Impulse Purchases
It’s always easier not to have to plan your spending and just purchase something whenever you feel like it. Unfortunately, not everyone has deep pockets and impulse purchases can eventually lead to serious financial problems. However, by letting a child know that sometimes it’s better to delay certain purchases, you will be setting a good example.
5| Living Off Credit Cards
Teaching a young adult that it’s okay to live off credit cards is wrong. By doing this, a child will have trouble gaining financial independence later on in life. Encourage your kid to only use credit cards as a form of convenience and avoid co-signing a credit card.
6| Focusing Only on One Job as Source of Income
One of the most common mistakes parents make when teaching their children about money is not mentioning the value of creating additional sources of income.
Investing, trading, or creating passive income might have been associated only with small groups of well-trained, risk-taking businessmen in the past. However, nowadays, with the economy and job market that are constantly shifting, having a small gig on the side is something everyone should try. It is also very easy to do! For instance, besides your regular office job, you can make have an extra source of income by performing freelance jobs in your spare time, renting a room in the house or getting into affiliate marketing.
7| Not Taking Advantage of Teachable Moments
Parents who are having trouble lecturing their kids about money should use teachable moments. For example, have your kid gather coupons from the supermarket and talk about all the financial benefits from these coupons. You can also talk about how much money is spent on food in the house on a weekly basis and how it is important to keep track of the money that is being spent on buying groceries.
Not everyone is perfect, and sometimes experiencing poor money lessons from parents is inevitable. Luckily, there are many ways to recognize bad financial decisions and learn how to fix them.
Sienna Walker is a money-conscious blogger, a green-living enthusiast, and an ex-tutor. With her background in teaching, Sienna often shares her tips and strategies with parents who want to help their children become wise adults. Right now, she is writing on behalf of 1300 Rubbish, experts in keeping clean home and office environments.