Parents are overwhelmed when it comes to fulfilling their child’s needs and often fail to plan their finances while parenting their kids. If you are on the lookout for the money mistakes that you, as a parent, should avoid, then go through this.
Do not buy things for your kids just because other kids have it. Instead, buy them when there is a need. This will make them realize the difference between needs and wants, and that everything needs to be earned in life.
It is a natural human tendency to shower all the love and happiness in the world on kids and feel content with a cute smile on their faces. While giving every possible thing to kids, parents hardly think of the amount of money they are spending buying certain unnecessary things. They just want to give a ‘quality life’ to their kids at any cost.
However, it is the need of the hour to understand the cost of living and plan accordingly. Lack of financial planning may give rise to financial crises and make life difficult. There is no harm in fulfilling all the necessities of your kids, but it should not be done only to match the contemporary standard of living or to make your kids happy.
Money Mistakes Parents Should Avoid
Buying Expensive Things
Parents, in the first place, need to question themselves that if an inexpensive thing does the same job as an expensive one, why is there a need to go for the expensive one? If you, as a parent, learn to make out the difference between a need and a want, the kids will automatically learn it from you.
Furthermore, if you are convinced that buying only branded items means giving everything to your kids, then they will also start believing the same and soon get addicted to brands. This addiction will grow more as the kids grow older, and the expenses will become heavier on your pocketbook.
Giving More Importance to College Than Retirement
It’s a good idea to pay the initial college fees and give a head start to your child in his career, but it should not be done at the cost of your future. There are several facilities that can take care of your kid’s education. Part-time jobs, scholarships, and student loans are a few things that may help the child get through his higher education easily.
It is important for you to save for your life after retirement and prevent dependency on your kids.
Buying Things in Excess
New parents are more susceptible to these mistakes because they find a lot of new things on the market and get tempted to adorn their babies with them. However, they don’t realize that they are purchasing in excess and ultimately wasting too much money unnecessarily.
For instance, there is no harm in getting a good stroller and good quality clothes for your baby, but buying a new stroller every few months because the existing one doesn’t fit on the back seat of your car, or just because there is a new stock of unique stroller designs on the market, is not good for your pocketbook. Similarly, though the kids look adorable in those tiny clothes, do they really need a huge wardrobe of branded clothes, when they just have to wear them and sleep most of the time?
Avoiding Money Talks With Children
Not talking about financial issues in front of your kids will make the kids feel that money is an unlimited resource and it can be available to them whenever and in whatever amount they want. Do not think that kids are immature and cannot be a part of financial discussions. Kids around the age of 10 or 12 are capable enough to understand basic financial matters and can take up the responsibility to deal with their own little expenses.
Moreover, if you have started giving a monthly allowance to your child, ask him to pay for the items he wants, but you think are mere luxuries. This will make him understand the difference between needs and wants because his own money will be going into it.
Not Having a Disability/Life Insurance
As long as we are healthy, we don’t really feel like getting life insurance or disability insurance. However, you never know what may happen the next moment; probably a mishap at the workplace may shatter the life of your family members and leave you in a helpless situation. Therefore, disability as well as life insurance should come in handy in case of any emergency.
Working for Longer Hours
It’s completely acceptable that you need to work hard to fulfill the needs of your family and give them a comfortable life. However, it is also important to understand the capacity of your mind and body and the limit to which you should stretch yourself to work. While working more you may happen to live less and at the same time put your health at a higher risk of several health problems.
Leading by (Wrong) Examples
Apart from the money mistakes that parents make with their kids, they often fail to plan the finances for other things. On one hand, some parents keep telling their kids to use money wisely, but on the other hand, buy expensive gadgets, spend on vacations, etc.
One thing parents need to know is that children learn more by watching their parents’ actions rather than verbal teaching. Hence, set good examples before them and make them learn more and follow it throughout life. Show them that what you do is what you teach.
Now as you know that these are the money mistakes that should be avoided in life, it will be easier for you to spare a good amount of money for your future, and at the same time make your kids learn the value of money and how to use it wisely.