Are You Teaching Your Children Bad Financial Habits?

by Fox Symes on March 12, 2014

Are You Teaching Your Children Bad Financial Habits?

It’s important that you teach your children good financial habits as early as possible. This will help to ensure they have a stable and secure financial future well throughout their teenage and adult years. If you’re concerned that you may not be the best role model for your child at the present time, then read on. Here are 4 things you can do together with your child that will help them become financially responsible throughout their lives.

1. Create a budget together.

Getting into the habit of creating a budget is great for your children. Budgets are necessary in life to save for that dream video game console, new car, or overseas trip. Make sure you sit down with your child and show them how to budget effectively. You can use your own budget (say, food budget) as an example to show them how it all works.

2. Stick to the budget.

Of course, a budget doesn’t mean anything, and won’t do you any financial favours if you don’t stick to it. In the food budget example above, take your child with you on your weekly shop. Demonstrate your discipline in sticking to the budget and refraining from making purchases that are well outside it. It’s never too late to be an effective and responsible role model. Having your child (or children) involved in the creation and implementation of the budget will give them a good example to follow in their own lives.

3. Set up a savings goal together.

Everyone has something they want to save for. This usually starts in the younger years and doesn’t end well throughout life. Helping your child set up a savings goal can help them stay motivated in sticking to their budget. Whether it’s to save for a new toy, video or computer game, or new cricket set, getting your child into the habit of setting up a savings goal will help them when it’s time to buy their first car, or put a deposit on a new home.

4. Don’t use your credit card.

Getting into the habit of using your credit card, and potentially spending money you don’t actually have, isn’t a habit you’ll want to instill in your children. Too many people fall into credit card debt these days, and this causes all sorts of financial pressure and problems. When around your child, always pay with cash. If you do need to use your credit card, try and do it out of your child’s view. The main thing here is to show your children that things should only be paid for with cash. This will stop them relying on little pieces of plastic throughout their lives (which may eventually land them in hot financial water).

Children learn things from their environment, including good and bad financial habits. Make sure you’re a positive role model on this front, and take heed of the above advice. Instilling good financial habits in your child at an early age will only pay dividends for them in their financial future. And isn’t that the kind of future you want for your children?

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