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Health & Fitness

Are you making mistakes in raising money smart kids?

All parents want to raise financially responsible children, but looking at young adults’ finances today, it’s clear it’s easier said than done.  Below are 3 common mistakes I see and quick fixes to help your children be money smart:

Problem - Not talking about money – Parents often avoid talking to their kids about the family’s money situation.  Whether to prevent kids from stressing over a lack of money or to prevent kids from knowing they’re “rich”, it’s a topic that’s often given the silent treatment.  This creates kids with no practical concept of how money is earner, saved, spent, and managed. 

 

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Quick fix – Have a monthly family conversation about how the family’s money will be spent weighing the pros and cons of different “wants” and prioritizing the “needs”.   Families of all income levels can work through what is most important, what should be saved for, and what just isn’t a priority.

 

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Problem – Relying on plastic – It’s hard for kids to understand the “magic” of a credit card.  They don’t see money going out the door or have the experience of having to give up their money to get something else.  All they learn is that with the swipe of a card, they can instantly have what they want.

 

Quick fix – Try to use cash even if it’s a little inconvenient.  Have your kids count the money and hand it over.  This will reinforce the concept that money is something tangible you have and when you spend it, it’s gone.  Kids need to understand that if you don’t have cash (whether in your hand or in the bank) there is nothing to spend!

 

Problem – Having one parent manage the money.  Kids copy what they see.  If only dad pays the bills or only mom seems to know the household budget, kids will pick up on these “roles”.  It’s more important than ever that every adult has the ability to manage his or her own money and that couples are both involved in the family finances

Quick fix – This one is a toughie, families are so busy and parents need to divide and conquer.  Try to ensure that you and your partner both discuss money in front of your kids and that you don’t say things the perpetuate gender stereotypes about whose responsibility the money is.  I see too many women that thought their husband would eventually come along and take care of their finances and they’re in a real bind when life doesn’t go the way they planned.

Want to talk more about how to raise financially responsible children?  Shoot me an email at laura.chmar@mainpointe or post a comment with a question I’ll address next week.   

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