Costly Mistakes Parents Make That Might Hurt Their Kids’ Financial Future
Not everyone has the privilege of growing up financially literate. It's a topic schools hardly touch on, and it's something many parents neglect to teach their children.
While ignoring financial literacy is already problematic, there are other things Mom and Dad do that don't help either, like not having the child invest in their skills. Continue reading and find out more mistakes made by parents that might hurt their child financially.
Money For Good Grades
While this topic still generates a ton of debate, deciding that payment isn't the best route for your child who receives good grades is okay. It can condition the kid to focus on getting good grades instead of pushing the limits for more. This can hurt their motivation after graduation.
Building "Character" With Sports
Getting a kid involved in sports isn't a bad idea if that's what they really want to do. If they have no interest in it and fail at it, that can build a lack of confidence that follows them through adolescence.
Forbidding Them From Using Social Networks
There are many reasons why this isn't a great idea, but I'll focus on one. You never know what talents your child has that could help them get some buzz and help build their brand young.
Learning Only Happens Inside Of School
The school shouldn't be the only place your kids get their information. The school systems don't teach students about everything, especially financial literacy. It's also essential for them to get real-world experience to help gain and sharpen skills.
Not Letting Them Get Into Conflicts
Knowing how to interact and problem-solve is a crucial skill that professionals need to have. Babying your child by keeping them from conflict will only create a higher hurdle for them to leap over.
Constantly Showing Your Struggles
You don't have to wear your cape all the time. It's okay if your children see you struggle sometimes, but don't let it become a habit. Not every kid has the power to overcome hardship if that's all they see while growing up.
Putting Other Successful People On A Pedestal
If everyone who read Bill Gates' or Warren Buffett's books solved all their money problems, this slide wouldn't be here. They don't, and that's why you can't have your child look up to them. Finding what works for them is the best path.
Backing Up Your Child In Front Of Strangers
A parent should always side with their child and take anything coming from outsiders with a grain of salt. But solving their problems for them or being too involved means they never learn for themselves.
When a kid has an issue with someone and a parent is there to see it, the mom or dad should let them handle it (only intervene when needed). This helps build a sense of responsibility for their life.
Not Letting Them Express Their Feelings
These days, being able to recognize and manage emotions is a primary skill among the many parents need to have. When parents attempt to replace their child's feelings with what they deem "acceptable," it can prevent the kid from making healthy decisions in the future.
Teaching Them Only To Invest In The Market
In the past, throwing your money in the stock market was a brilliant idea, but that can't be your only plan these days. Investing in yourself is as essential as investing in the market.
Not Letting Them Make Mistakes
Mistakes help you learn and grow. Unless you have a perfect child, messing up needs to happen. It gives them the chance to recalibrate and come back with a better approach. That's a trait that helps overall financial literacy.
Forcing Them To Make A Decision About Their Future
There are only so many kids that know what they want to become as an adult. Even those children might have a change of heart one day. Giving your child the space to decide their future gives them ample opportunity to research on their own and decide what's best.
Praising Everything They Do
Consolation prizes are a thing of the past. If you constantly cheer on your child for things they should do, where's the growth in that? This behavior makes them only want to do things if they get praised for it.
Paying For Irrelevant Things
If your children see you buying fancy gadgets and clothes (and other things you hardly use), it will rub off on them. Practice making practical purchases around your child instead of unnecessary ones.
Buying Them Everything They Want
Your kid should know the value of working hard. Giving in to all of their desires when asked doesn't prepare a child well for the reality of life. Try setting up money-oriented goals that give them a reward upon completion.
Not Giving Them Books About Money
There are plenty of books out there that will help a young person develop their money skills while growing up. One, for example, is Rich Dad Poor Dad. Giving your kid a book like that at a ripe age will change their trajectory drastically.
Forgetting To Prep Them For An Emergency Fund
Knowing what I know, there are parents out there who don't give their kids any money advice. Fast-forward 20 years, and these are people who lose a job without having an emergency fund saved.
Ignoring Deals And Coupons
One coupon doesn't seem like much, but 15 coupons start to add up over a month. Strategically using coupons and finding deals is a fabulous way to pocket extra cash throughout a year. Teach your kids young how to find the best deals.
Forgetting About A Retirement Fund
A retirement fund is one thing everyone should have. If you didn't start one for your child because you didn't have the means, that's okay. As long as you teach them and give them the proper tools to succeed on their own.
Not Giving Them Money To Manage At A Young Age
I'm not saying that you should let your child manage a bank account at a young age, but giving them small amounts of money, such as a few dollars every week if they complete their chores and teaching them about saving it rather than spending right away helps them learn basic management skills early in life.
Bailing Out Your Kids Whenever They're In Trouble
As a parent, you don't want to see your kid take a hard fall, but protecting them from doing so can set the precedent that they'll always get a bail out. Whether a financial issue or something else, letting your kid face the repercussions of their actions will allow them to gain a sense of accountability to themselves.
Giving Them Piggybanks Where They Can't See The Money Inside
A piggybank is a great tool to teach your child initial ideas about saving, but make sure to use a clear jar or bank. Young children often learn best when there is a visual component they can tangibly check: they'll get to physically see the bank grow every time they choose to save rather than spend.
Not Teaching Teens About Credit
Credit cards are one of the most common ways people purchase things in the world and also one of the easiest ways to rack up debt at a young age. When your child is in their tween-teen stage, explain how credit cards work and how everything you spend on one has to be paid off later.
Hiding Anything You Do With Money From Them
You shouldn't throw your kids in the middle of your money problems, but taking your kids to the bank with you from time to time, allowing them to be nearby while you pay bills, or even mentioning your mortgage can help them begin to understand the cost of living from a young age.
Not Teaching Your Children To Give Back
People feel joy when they're able to give money to people in need and causes. The amount doesn't have to be that large to have an impact. While it might not obviously seem to tie into financial literacy, teaching your children the value of charitable giving helps them learn that giving money to others can be a source of joy, not just material possessions.
Not Forcing Them To Make Money-Related Decisions
If they've been saving up money for a while and want to go shopping, make sure to prompt them to think critically about their spending. For example, if they want to buy a video game, remind them that they also wanted some new basketball shoes and they can't afford both right now. This forces them to weigh their options and make better financial decisions.
Not Explaining Financial Privilege To Your Children
In order to understand finances, children need to understand how money works in the context of society. Explaining how different people in different parts of the world, the country, and even your city have different financial situations and how that impacts your way of life helps them understand money on a larger scale and helps them understand the world better as a whole.
Discussing Finance More With Sons Than Daughters
A 2014 study found that parents tend to talk about money more with their sons than with their daughters leading to 45% of boys from the survey believing they had a good understanding of money management while only 38% of girls felt the same way. Help bridge the gender gap by conscientiously teaching your daughter(s) about finances.
Underestimating Children's Ability To Understand Money
Children are incredibly fast learners, but we often underestimate their ability to grasp concepts like money. From young ages, children can begin to understand saving, costs of items, and basic ideas about interest, loans, and debt.
Not Teaching Them Anything About Money!
You have so many years with your child, so don't waste them. Instead of letting your son watch TV all of Saturday morning, give him a brief lesson on money before he can watch cartoons. There are so many things you can teach, so don't forget!
