There’s nothing I would love better than to sit down and tell my three boys all the right things do about money.
Unfortunately, just as is the case with every other lesson we provide, kids learn more from what we do than what we say. My boys are no exception to this.
If our words say one thing, but our behavior goes in the opposite direction, the kids will come away with our behavior but not our words. So how you behave with money will be the most important financial lesson that you can teach your kids.
Along that line, there are some financial behaviors you don’t want your kids to learn from you.
1. You operate without a budget.
If you spend without a budget – meaning that you buy what you want/need without regard for the cost – your kids will pick up on that. They’ll automatically disassociate buying from cost.
In that way, your absence of a budget will become their legacy. They won’t have a budget either, and will reap the negative consequences that come from a lack of spending discipline.
2. Debt is your friend.
One of the biggest financial problems many households have is almost a silent one. It isn’t debt itself, but rather the quiet acceptance of it as some sort of “friend” in your life. If you come to see debt in that way, your kids will too.
But debt represents a reduction in future income, because you are paying for yesterday’s expenses today, and today’s expenses tomorrow. It’s a complex game of kick the can, and hopefully kicking it far enough down the road that it doesn’t hurt you in any way today. It’s costly — this lifetime cost of debt calculator can show you just how costly it is.
This is not a healthy view of debt. You can and should talk to your kids about debt, but how you handle it yourself is much more important.
3. If our friends have it, we need it.
If you are taking your spending cues from your friends, you’re subtly teaching your kids to let their spending choices be determined by other people. And if other people are indirectly in control of your spending, then it means that you aren’t. That’s a lesson your kids don’t need to learn.
4. Credit cards are a way of life.
Do your kids you see spending money primarily using credit cards? It may be good to increase your spending using cash. This will give your kids an opportunity to see that spending money costs actual money and isn’t accomplished solely with the use of a magical card that seems to provide all that’s ever needed. It’s a visual lesson, but a powerful one that works better for kids.
There’s another possibility from the constant use of credit cards. It’s easier to deny that you have a debt problem when you’re using credit, also because actual cash doesn’t leave your wallet or your bank account. Kids can get caught up in that denial as well.
Source: Business Insider | Jeff Rose, Credit.com
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