No one ever said being a parent was easy, and it wouldn’t be uncommon for you to feel like you’re making mistakes here and there. And if there wasn’t already enough things to worry about when you’re raising your kids, the bad financial habits you may have picked up could also be rubbing off on your kids in the wrong way.
There are certain specific financial mistakes that parents may be more prone to make, and the older your children get, the less time you’ll have to set a good example for them while they’re still young. Let’s take a look at five bad financial habits for parents to avoid.
This may be one of the most important things for parents to keep in mind when it comes to their kids, but the example you set for them could have a big impact on the behaviors they pick up. How you manage your money is no exception. By picking up bad financial habits, you may be exposing your kids to things that they could easily end up picking up themselves.
If they see you that you’re living paycheck to paycheck and being careless with your spending, you may be setting them up to repeat the same behavior. You might be in a tough financial position to no fault of your own, but even in this instance, making sure your kids see you create a budget and save your money can go a long way in shaping the financial habits they go on to implement later on in life.
If you have any sort of financial independence, it’s a good idea to have a budget. If you’re raising kids and maintaining a household, it becomes essential. On top of keeping up with all of your monthly expenses, random things like sports equipment, gifts for birthday parties, and new clothing can have a serious impact on your finances if you’re not managing your money carefully.
For example, if you don’t have a proper budget in place and you’re not being careful with your finances, it may be easier to squander extra income – like a bonus at work or a tax return – on things like travel or gifts. If you’re living on a tight budget, these windfalls of cash may be better served going towards things like an emergency fund, your retirement, or any of your more substantial financial goals.
The good news is that there are some tools out their to help you manage your money, like these free personal finance apps or our ultimate budgeting guide. It’s important to use the tools at your disposal to help kick some of your bad financial habits.
When you have your normal monthly expenses to deal with on top of the immediate needs and wants of your kids, you may have a hard time finding room in your budget for savings. But if you want to prepare for the unpredictable needs of your children, it might be a good idea to have an emergency fund at the ready.
Bad things can happen at a moment’s notice, and unexpected expenses can crop up without warning. That’s why it’s important for parents to have some funds set aside in case emergencies do come up.
If you’re facing an unexpected medical bill for one of your children or an emergency car repair to the family vehicle that you don’t have the funds to cover, consider taking out an installment loan with MoneyKey. These loans may provide you with the financial safety net you need to deal with these emergency expenses and hold you over until your next paycheck.
No one wants their kids to feel left behind, so it’s normal for parents to try to keep up with a certain kind of lifestyle so their kids feel like they fit in with their peers. This might lead you to take expensive vacations or sign your kids up for pricey travel sports teams instead of cheaper community leagues just to keep them happy.
After all, everyone wants their children to be happy, and you might think that lavishing them with gadgets, new clothes, and toys will do just that. While you may be tempted to grant your kids their every whim, it may not be the best move for their financial future, or your family’s. If you want them to avoid falling into bad financial habits, it’ll be good for them to learn to not indulge every purchase impulse they have in the future.
It’s also important to not let how other parents spend their money dictate how you spend yours. Not only will you be spending money on things that aren’t essential to your family, you also may be extending your funds in a way that could lead to significant debt.
Cutting the financial cord with your children can be one of the most difficult choices you’ll need to make as a parent. But not having a concise plan to slowly start giving them some financial independence can be a big mistake. This is how you end up paying for their car insurance, phone bill, and rent without any plan in place to stop. Not only can this be a drain on your finances, it can also stunt your children’s growth when it comes to their financial independence.
There isn’t necessarily a perfect moment for every parent to stop financially supporting their children, but it’s important for you and your partner to at least decide when this time will be well before it comes. If you do end up supporting them as they transition into adulthood, consider attaching some conditions to your continued support. For example, if you’re paying their college tuition, let them know that they have to keep up a certain GPA if they want you to keep paying for their education. If you’re paying for their living expenses, give them a deadline for when they have to find employment.
Everyone wants to be able to support their children, but without giving them any financial independence, they may be prone to picking up bad financial habits that’ll hurt them later on in life.
No parents are perfect, and everyone is bound to make some mistakes along the way. With so much to worry about when it comes to raising your kids, the occasional misstep will happen. Regardless, it’s your job to set a good example for your kids to follow, and this definitely extends to how you spend your money. Falling in to bad financial habits can do more than just hurt your finances. While it can make it harder for you to reach your short and long-term financial goals, you also may be passing these habits down to your kids. And the last thing you want is for them to fall into a never-ending cycle of poor money management. Keep these money mistakes in mind and try to set the best example for your children!
Do you have any tips for parents to avoid bad financial habits? Share below!