6 Bad Financial Habits You’re Teaching Your Kids (And How to Stop)

Not Budgeting

A well-planned budget is the cornerstone of financial health. If you’re not budgeting family finances your kids will have no role model in this regard. Involve your kids in budgeting things like family entertainment or even buying their own school supplies. It will help teach them how to budget their own finances in the future. Even better? Create a budget worksheet for your kids to fill out on their own and manage their allowance or part-time job spending.

Financial independence is just about everyone’s goal, but are you teaching your kids other habits? If your kids see you making bad financial decisions only to be bailed out by friends or family, they’re learning that someone will always be there to pick them up when they fall. Having an emergency savings fund on hand helps you to be self-reliant and to display financial self-reliance to your children. Put your foot down. If their allowance doesn’t cover it, don’t shell out more cash to help them purchase that video game or purse they’ve been obsessing over—make them save for it.

Instant Gratification
A compulsive need for instant gratification has put many people underneath unmanageable levels of debt. If you have a habit of putting it on the card and worrying about how to pay for it later, your kids are going to pick up on that. Teach your kids how to delay gratification by having them pick something they can afford—just not today. Then come up with a plan for how they can save for a new bike, skateboard, iPod or whatever it is they simply “must” have.

Overemphasizing Material Goods
It’s often said that money can’t buy happiness. However, many people don’t actually believe this. They think that when the going gets tough it’s time to buy some comfort objects. Still, other people tie their happiness completely and directly to what they own, rather than more intangible objects. Teach your kids that the best things in life are often free. Find low- or no-cost activities to participate in as a family.

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Keeping Up Appearances
When hard financial times hit, many people are under the impression that they have to appear successful to be successful. Thus, you have business owners driving around in cars they can’t really afford in an attempt to appear as if they are still successful. This gives kids the impression that conspicuous consumption should be the last thing to go, rather than the first. When belts need to be tightened, tighten them to show your kids how to react to a downturn in the economy or the loss of a job.

Not Planning For The Future
You know you need to plan for your family’s future in the form of retirement and college savings. Kids will need to start planning for their own financial future soon enough. Prepare them for that by teaching them about investing in the market at an early age. Help them to pick out stocks, then follow them in the paper. You don’t have to actually invest on your child’s behalf, though if you can afford it, why not? Still, the very act of observing the market in action will get your kids ready for the day when they’re planning a family of their own.

Indeed, all of the above pieces of advice are about planning for the future. They all train your children for the day when you will no longer be able to take care of that for them.