When it comes to finances, it can be challenging to find the right balance as a parent. How much should you talk about money with your children, and what information should you share?
Talk About Money With Your Kids
If you want your kids to become financially savvy adults, you may want to start discussing a few basics with them when they’re younger, or at the very least, don’t avoid the topic altogether. We are not taught financial responsibility in schools, most schools even consider financial education as an elective. Our money habits are first taught at home.
Want to help set your kids up for success? Here are a few best practices to keep in mind and five things to watch out for.
5 Common Financial Mistakes to Avoid
1. Never discussing money. Money can be a sensitive topic, even within a family. Never talking about income, budgeting, savings or expenses can make it difficult for kids to get started when it comes to managing their finances effectively later in life. You can even make it fun with this interactive app that harnesses the power of play to teach kids how to earn, save, invest, and share money.
2. Setting a less-than-great example. Do you regularly set goals and track your progress? Do you have life insurance? Making strategic financial decisions for the future can help set a good example for your kids.
Where to Start?
Your mindset is where you must start. If you get this right, then much of the battle is won. We know that much of our mindset is learned, but the good thing is it can be changed.
Assess what you want out of life. What are your hopes and dreams? Write them down. If you don't know, take some time to think about the things in life that matter to you.
You have to design the life you want. If you don't design the life that you want, someone else will do it for you.
3. Splurging too often or failing to set limits. Spending money on your kids is a natural desire, but it can be a mistake not to set limits. For example, some parents end up overspending on their child’s wedding at the expense of their own retirement goals.
4. Lifestyle creep. Lifestyle creep can happen to anyone. In families with children, it’s possible to fall into the habit of “keeping up with the Joneses” and purchasing expensive items and activities for kids that might stretch the budget.
5 Biggest money leaks that most people don't even realize are an issue:
Paying more TAXES then we have to
How are you funding your retirement plan
How to pay for your home
How to make major purchases
Those are the biggest ones. Many other little leaks can add up too once you are aware of your leaks and can tweak.
5. Not planning for financial independence. Being able to provide for your kids financially is a wonderful feeling, but some parents find themselves in the position of paying for their child’s lifestyle indefinitely. Having upfront conversations about money and timeline expectations can help build a bridge for your kids to become financially independent.
Have questions or need to check in? Reach out today.
The banking app for kids that plays like a game 🧠: GravyStack harnesses the power of play to teach kids how to earn, save, invest, and share money. Start your kid on the path to financial freedom today!
Free e-book: Taking Control Of Your Finances