5 money mistakes parents make

1. Money grows on trees

It doesn’t. ‘How much do you earn?’ ‘What did you pay for that?’ Do your kids ask these kinds of questions? Do you tell them that it’s impolite to do so? If so, you’re missing an opportunity to explain where money comes from and how it’s spent. Obviously, you shouldn’t worry your children with the nitty-gritties of your household budget, but sharing some of the details – for instance, how much your grocery bill comes to or what your monthly petrol spend is – will give them a better understanding of the value of money. So next time your child leaves a light on when she leaves a room, don’t just say, ‘Switch off that light – electricity costs money,’ rather tell her much you spend on electricity each month.

2. You want it? You can have it.

You can’t. Most parents have given in at some stage to the incessant whines of a child who wants a pair of designer jeans, an iPod or something similarly expensive and not necessary. But everyone has to learn, eventually, that they can’t always have what they want – because, often, they simply can’t afford it. If your child wants a big-ticket item, show him how to put aside some money each month to save towards it (and, if you want, offer to pay a portion of it). Deferred gratification is a good general lesson to teach your kids and has this going for it: your child really will appreciate whatever it is so much more by the time he’s saved enough of his own money to buy it.

3. Don’t worry, Mommy will bail you out

She shouldn’t. It’s very tempting to help out a child when she or he has made a financial blunder – but if you do it once, you’ll probably be expected to do it again. A kid who spends all her pocket money on sweets or trinkets and then doesn’t have enough to join her friends when they go out to a movie learns an interesting lesson in the value of budgeting. By not coughing up, you’ll teach her the importance of making what money she’s got stretch across what she wants to buy with it.

4. It’s okay if Daddy does it

It’s not. If you mismanage your own finances, whether it’s by cheating the taxman, not paying bills timeously or binge-spending as a form of retail therapy, your child will think this is acceptable conduct. It’s pointless to lecture your kids about good money management and then observably do the opposite. Children learn every bit as much about behaviour by watching their parents as they do by listening to them. Don’t just expect your child to do what you say. Try to be consistent and lead by example.

5. Money can buy love

It can’t. If you attempt to assuage parental guilt (of whatever kind and whatever its cause) by giving your children more pocket money than is appropriate for their age, buying overly extravagant gifts or giving in to unreasonable demands for expensive items, you’re sending a dodgy message: that money can replace affection, acceptance and interest. Money is, of course, a necessity, but it needs to be respected as currency and should never be used as an emotional bargaining tool.
How much do you tell your kids about the family finances? Do they understand the value of money?

Do you teach your child money management? At what age do you think it's appropriate?

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