5 Bad Financial Habits You Could Be Teaching Your Kids

As parents, most of us are concerned about the things our children are learning when it comes to faith, morality and healthy living, but we don’t often consider teaching kids about sound financial management.

Many of us never learned good financial habits from our own parents; at times, it can be tough to break out of that cycle of financial nonchalance and worry more about teaching our kids sound financial principles. But our kids are like sponges — if we’re not careful, they’ll soak up all of the things we’re doing financially, both good and bad, picking up our bad financial habits without even realizing it.

5 Bad Financial Habits to Break Right Now

They say that actions speak louder than words, and I believe that with our kids, this is very often the case. So what bad financial habits might are you displaying for them to see? Here are a few of the most common:

1. If you want it, buy it (on credit).

Many folks see something they want and go ahead and buy it, even if they don’t have the cash saved up to pay for it. There’s no room for delayed gratification when credit can save the day — just buy the things you want, and pay them off later.

Instead of living this way, buy only the things you’ve saved up for. Instead of purchasing impulsively, give yourself a “waiting period” to decide if the purchase is really necessary. In many instances, you’ll realize that you don’t want the item as much as you thought you did.

2. Allowing others to bail you out.

One problem that seems to carry from generation to generation is a reliance on parents or family to bail you out when you get into trouble.

Have car trouble? Ask Mom and Dad to loan you the money to fix the problem. Can’t pay rent? Go to them again to help you make it until next month.

Your kids will notice your reliance on your own parents, and if you don’t stop it soon, they’ll be coming to you for money down the road! Instead, set up an emergency fund so that when a major negative event happens, you’ll be ready for it. Save up at least 3-6 months of expenses, and plan ahead for the worst case scenario.

3. Consistently spending more than you make.

If you always find that money runs out before the month ends, you may have either a spending problem, or an income problem. In either case, it’s time to get back to basics.

Cut out the things you don’t need. Work on spending less or making more, or a combination of the two. If you don’t change course, your kids will begin to think it’s normal to spend, even when the money isn’t there. That can only lead to financial ruin for you, and for them.

4. Believing that money and things can bring happiness.

Far too many of us allow ourselves to believe (even if subconsciously) that buying the next gadget, new car or house will help us feel the happiness that we’ve longed for. Over time, the possessions and debt pile up, but the happiness doesn’t follow.

Teach your kids instead to find happiness in their faith, family, giving to charity and in sound financial management. Stress that money and material possessions can’t bring happiness in and of themselves; true happiness lies elsewhere.

5. Not planning ahead.

We get caught up in the day-to-day stresses of our jobs, caring for our children and daily routines, never getting around to setting up financial plans. With no budget, savings or retirement goals, your monetary life will become disorganized, and your kids will sense when the house of cards starts to crumble. Instead, set up a family budget, teach your kids about money and make sure you have a complete financial plan in place — including insurance and health care coverage.

Teaching kids about money isn’t a simple process that will happen overnight; it’s a process of guiding them over time, through actions and instructions. If you can be on the lookout for bad financial habits in your own life, work towards fixing those and you’ll be well on your way towards giving your children a head start on their own financial future as well.