As parents, it’s crucial to not divert from any initial financial planning or worse, abandon them completely! There are a few things that can go wrong if we’re not careful about money, so let’s take a look, shall we?
Giving in to trends
Many kids have stuff they don’t need. If you’re buying something for your child just because many others seem to own it but it is of no real importance, then you are teaching junior that it’s alright to buy stuff just to ‘fit in’. Turn this around as quickly as you can and encourage instead the purchasing of stuff that’s needed. Impart into your young one the importance of valuing money and spending on things that you need first and on stuff you like only if you really can afford it. Only a parent can effectively teach his or her child the difference between needs and wants, and that every purchase should matter.
Plan before spending
Lack of financial planning may give rise to financial crisis and make life difficult for the whole family. So, remember, while there is no harm in fulfilling all the necessities of your kids, it should not be done however only to match the contemporary standard of living.
Neglecting your nest egg
Preparing for your child’s college education is good, but not the cost of your future. There are several ways to take care of your kid’s education. Young adults should be encouraged to seek part-time jobs, scholarships, and student loans that can assist them through higher education. Remember, it’s just as important for you to save for your life after retirement too, and prevent dependency on your offspring.
The constant splurging
If you are convinced that buying only branded items means giving your kids the best, then they will also start believing the same and soon get addicted to brands, unwittingly deceiving themselves into believing that only branded stuff can get the job done. This addiction will grow more as the kids grow older and pretty soon they’ll be ‘needing’ clothing, bags, shoes, electronic devices, and gadgets from upscale names because that’s the way they were brought up.
These will inevitably add up to unnecessary spending with a potentially heavy burden to a family’s finances which may even give rise to a family crisis, parents blaming one another, etc. To avoid going down this road, start teaching your child the value of money and the art of making smart purchases from young. so that they cultivate smart money habits that will serve them well in the future and also help keep the family’s finances in check!
Putting off ‘money talk’ with kids
There is a big difference in talking to your kids about the birds and the bees and talking to them about money. A kid does not need to be of any certain age to be taught lessons about money. Most are not as immature as their parents think they are when it comes to the subject of money. Kids as young as five or six are capable enough to understand basic financial matters and can take up the responsibility to deal with their little expenses.
Failing to buy insurance
As long as we are healthy, we don’t feel like getting life insurance or disability insurance. However, you never know what may happen the next moment; probably a mishap at the workplace may shatter the life of your family members and leave you in a helpless situation. Therefore, disability, as well as life insurance, should come in handy in case of any emergencies.
Leading by all the wrong examples!
Apart from the money mistakes that parents make with their kids, they often fail to plan the finances for other things. On one hand, some parents keep telling their kids to use money wisely, but on the other hand, buy expensive gadgets, spend on luxurious items and lavish vacations, etc.
One thing parents need to know is that children learn more by watching their parents’ actions rather than verbal teaching. Hence, set good examples before them and make them learn more and follow it throughout life. Show them that you do indeed walk the talk and practice what you preach!
Be money smart for your kids and your future
Being money smart will pave the way for you to impart good money habits in your kids and at the same time. ensures that you can keep aside a decent enough amount of money for your future too!
