Having kids is not easy. Managing money is not always easy. Therefore we can’t blame you if, when you want to start teaching your kids about money, you’re unsure of how to do it. One way to make sure it goes as smooth as possible? Avoid pitfalls other parents have made so you’re set up for success. Below are some of the more common parental money mistakes. Bypass these and teaching your kids about finances will be easier, because you’ll already be leading by example.
Never Saying No
Kids want lots of things. You have to draw the line somewhere. We all want our kids to have everything they could ever desire, but teaching them that the world does not function like that is a valuable lesson. As US News reports, learn to say “no”, but also explain why that’s the answer. Kids need to understand that money, well, it does not grow on trees.
Modeling The Wronger Behavior
Just like you need to tell your kids “no” from time to time, you need to tell yourself that as well. Yes, the neighbors just bought a new BMW. No, you do not also need a new BMW. If your constantly trying to keep up with the Joneses, your kids will want to keep up with Jones Jr.
Saving for College, Not Retirement
You want your kids to be able to afford college, so you’re tempted to funnel more funds toward that than your retirement. This is a mistake. Your kids will have loans, grants and more to pay for college. If you don’t save for retirement, what will you have? Nothing much. Prioritize retirement so your kids don’t end up having to do it for you.
Supersizing the Support
Just as you must tell kids “no” when they’re young, you must be able to tell them the same thing when they’re older. If you have to financially support your adult kids, have a plan in place to end the deal right from the start. Transparency is key. Your kids will be better off if you set solid rules and then enforce them.