bad money habits kids

Are You Passing Bad Money Habits to Your Kids?

bad money habits kids

We don’t like to discuss money matters in front of our children. We tend to postpone this serious discussion till the right age. Little do we know, like all the basic manners, good money etiquettes should be taught from the very beginning. And like all other habits, children pick money habits from their parents. So be careful. And keep the following pointers in mind while dealing with money to ensure you don't pass on bad money habits to kids:

Never Succumb to Your Child’s Tantrums

Most parents fall into the tantrum trap. Sometimes parents say ‘yes’ to put an end to an embarrassing situation in a marketplace. And sometimes it is hard to see your child crying. But no matter what your situation is, don’t cave in. When you give in to your child’s demands, he tastes the easy way to get things done. And this is not the case in the real world. Teach them money is limited and we have to put it to the best use. Control is the key. Be a little strict with your child.

Give Allowance with Accountability

Pocket money is a great way to teach money management skills at an early age. But without accountability, it hardly serves any purpose. Give pocket money and follow a few rules:

  • Before handing out the pocket money, ask how they’ve spent the last month’s allowance.
  • Don’t give money before the due date. Let them wait. Ask them to manage money better the next time. Tell them that you too get money on a specific date.
  • If they make repeated mistakes with money, deduct the penalty from their allowance.

Don’t Fight Over Money in Front of Kids

This is a strict no-no. It sends a wrong signal that money is the root cause of all problems. And money alone can fix it. Don’t do that. Never fight over money. Whenever you and your spouse have disagreements over a financial matter, sort it out in a closed room.

Never Hand Out Credit Card to Teenagers

I’ve seen parents trusting their teenagers with credit cards. By nature, credit card is easy money. To children, it’s one swipe and an initial to buy a pair of jeans, which actually cost more than your day’s salary. It doesn’t project the importance of hard earned money. Instead of handing out the credit card to your child, give them cash. Better - let them earn it by doing chores.

Make Them Wise Shoppers

My mother used to take me for grocery shopping. I learned bargaining lessons at the age of 6. Some may say it’s early. But it actually made me a better shopper. As a teenager, I could get a better deal, better than most adults around me. Take your children for grocery shopping,  to local mandi and retail stores. Give them live lessons on negotiations and bargaining. Take them along when you have to return a defective product. They should know that shopping is not always pleasant, what problems they may come across, and how to handle them.

Teach Work Ethics by Paying Them for Chores

Fruits of labor are the sweetest. Let your child learn this at an early age. Give them chores depending on their age and pay them. But don’t be lenient. Give them a taste of real world’s work environment. Let them follow the rules, work hard and earn their reward.

Open Bank Account and Teach the Value of Savings

Piggy bank or a bank account cultivates the habit of savings. While a piggy bank is a household way to do it, savings account gives them a sense of ownership. Children take pride in having a bank account. It nurtures the habit of savings. Open your child’s account, teach them the basics of online banking, and take them to a bank whenever possible.

The Quintessential Money Talk

Don’t delay the money talk. There is no right or wrong time. Cultivate money manners from the beginning. A 6-year-old child needs to know the value of toys he owns. He should know enough to take care of his belongings. Similarly, a teenager should know that he can’t have all the things his friends have. Impart the necessary knowledge as per your child’s age. And you are the best judge of what to tell and what to avoid.

Is there anything specific you follow while dealing with money in front of your children? Please share in comments below.

A Company Secretary by profession, Saru found her true calling in writing. She blogs at sarusinghal.com which she religiously updates every Monday for the last five years.