3 Worst Mistakes Parents Can Make With Money
Written by
Cindy Lamothe
Edited by
Amen Oyiboke
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Parents have a lot on their plates — not only do they have to worry about raising their kids and providing for them, but they also have to be savvy when it comes to money.
While most parents have good intentions, they’re not immune to making money mistakes that can end up having severe consequences for their kids.
Here are the worst blunders parents can make with money.
Not Teaching Kids Financial Literacy
“Parents don’t like to talk about finances with their kids, but it’s an important conversation you need to have anyway,” said Bethany Hickey, personal finance expert and banking editor at Finder.
“I’m not saying you need to display your bank statements — I’m saying you need to give your kids a heads up on how expensive life is and how to manage finances.”
She said it is parents’ responsibility to teach financial literacy. Talk about the cost of living, like rent and grocery prices, what bank accounts are, and how lending and credit scores work.
“If you skip those conversations, early adulthood might lead to major financial mistakes that could haunt them for a long time,” Hickey explained.
“They might rack up credit card debt without knowing how APR works, overdraft their checking account without knowing what that means, or borrow from predatory lenders because they don’t understand how loans work.”
Deepak Shukla, CEO of Pearl Lemon Invest, agreed that a key mistake is not teaching children about money early.
“Parents who don’t involve their kids in financial discussions miss an opportunity to create responsible money habits, leading to financial struggles later,” he said.
Failing To Give Practical Advice
“I have learned that balancing immediate demands with future goals requires discipline and informed decision-making,” said Angelo Crocco, CPA and owner of AC Accounting.
One practical strategy he recommended is to automate savings for college funds and retirement accounts while maintaining an emergency reserve.
“I advise parents to regularly review their financial plans and adjust for changing circumstances, ensuring that current needs and future aspirations are met.”
He said consistent, incremental savings are far more potent than sporadic windfalls. This approach cultivates a resilient financial foundation and instills responsible money management habits in the entire family.
By avoiding impulsive spending and embracing strategic planning, he said parents can secure a brighter, more stable financial future for themselves and their children.
“Ultimately, thoughtful planning today ensures a legacy of economic resilience and security for generations to come, empowering families to thrive abundantly,” said Crocco.
Not Considering Kids’ Financial Security
One of parents’ biggest mistakes, according to Shukla, is failing to consider their children’s financial security.
“While it’s natural to prioritize a child’s needs, failing to save for retirement or build an emergency fund can leave parents and children vulnerable,” said Shukla.
He noted that parents often overspend on unnecessary extras, expensive rather than focusing on financial stability and long-term investments.
Crocco equally agreed that this is a key mistake in parental finance. “One of the parents’ most critical mistakes with their money is neglecting to plan for long-term financial stability while prioritizing short-term needs.”
He believes many families focus solely on immediate expenses, overlooking essential investments for education, retirement, and unforeseen emergencies.
“I have seen too many parents fall into the trap of reactive budgeting rather than proactive financial planning,” said Crocco.
Failing to save today, he explained, is like building a house on sand; your financial future becomes unstable and vulnerable.
“This mindset often results in missed opportunities for compound growth and long-term security, leaving families unprepared for life’s unexpected turns.”
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