3 Bad Money Habits You’re Passing on to Your Children

It can be easy to forget in our busy day-to-day lives, that our children are paying close attention to our words and actions. They emulate what they see around them and grow increasingly impressionable with age. It’s important to positively influence them by demonstrating proper behaviors and habits they can learn from. When it comes to finances, there are a variety of ways you can properly educate your children, including discouraging them from practicing these three bad money habits.

Impulse buying

When you go shopping do you follow a set shopping list? If your answer is “no” and you shop with your children, it’s time to start sticking to your plan. When you’re shopping, and grabbing things without any forethought, you are showing your children that sticking to a budget is not your priority. They may also view your impulse shopping as disorganized and unstructured. Instead, instill in them the importance of writing down a plan and getting only what’s necessary, to stay on the right track with spending.

Not talking about money

As children get older and they begin to understand the value of money, it’s important they are taught to be open about financial issues. Some view money matters as difficult or awkward to talk about. But, when it comes to building confidence in your children, it’s vital they learn the skills necessary to effectively manage their personal finances. Developing healthy financial habits from an early age is extremely important and it begins with everyday conservations.

Living above your means

If your child asks for something at the store, but you don’t have the money to buy it, it’s okay to use that old saying, “money doesn’t grow on trees.” So many Americans live outside of their means in an effort to “keep up with the Joneses.” Instead of raising entitled children that expect everything no matter how tight funds are, teach them the importance of differentiating between “wants” and “needs.” Help them understand that it’s okay to splurge on occasion, but it’s more important to budget and save in order to maintain good financial standing for a happy, stress-free life.

Article Source: Wendy Moody for CUInsight.com

More Bad Money Habits You Need to Let Go Of

Habits happen. When it comes to money, it’s a good idea to recognize the bad ones and kick them to the curb as soon as possible. Here are a few less-than-stellar money habits that you need to let go of right away.

Not setting goals: If you don’t have savings goals, you’ll never have the savings you need. You should be packing away money for retirement and at least have an emergency fund for those unexpected bills. If you don’t know how much you need to retire, checkout a retirement calculator like this one.

Picking up every check: It’s great to buy dinner sometimes, especially when you’re out with friends and family, but don’t feel you have to pay the check every time. Even if the bill is only $40-50 bucks, if it’s a regular thing, it can really add up. Having separate checks is the best plan, and feel free to pick up the check every now and again.

I’ll have what he or she is having: If you see your friend pick up a new 60” flat screen, it can make you very envious. Remember just because your friend has some new, cool toys doesn’t mean they haven’t put themselves in debt to get it.

Paying ATM fees: When you are going somewhere and you need cash, make sure you plan ahead. You may feel like stopping at a random ATM is no big deal, but those little service fees will rob you blind over time. If you’re going somewhere that doesn’t take plastic, plan to stop at your local branch and use the free ATM that’s provided for you.

Article Source: John Pettit for CUInsight.com

6 Bad Money Habits Not to Pass on to Your Kids

Whether your bills are paid in full at the end of every month or you have to do some strategic budgeting, there’s a good chance you have some less-than-perfect money habits. As a parent, they don’t begin and end with you; they affect your children too, and for a lot longer than you may realize.

Most young adults are entering the world without the basics of financial literacy. Many are taking on massive debt in the form of student loans and doing so without understanding the principles of interest, or saving for emergencies and the future. Though schools have worked to increase financial education among the young, the evidence suggests these classes alone are largely ineffective and must be supported by good financial practices at home too.

Thus, a hard look at your own financial habits, paired with transparency and good communication, could give your kids the financial lessons they’ll need long into adulthood. So what are common habits to avoid and how can you ensure your children don’t adopt them as their own?

1. Overestimating your financial acumen.

First, admit your mistakes and be willing to learn. If you don’t know the best practices for using credit or how to make a budget, learn with your child.

2. Overspending.

Whether you misuse credit cards or prioritize wants over needs, spending more than you have is a sure recipe for insurmountable debt and poor lessons for the kids. Set a budget and make them part of it. Be willing to admit when you make mistakes with your money, and talk with them about what you could do better.

3. Not saving.

Not everyone can afford to save and you may not have an emergency fund. But even if you set up a savings account to pull $50 from your pay every month, you can teach children an important lesson. They need to learn to set aside money for a rainy day and retirement too.

4. Ignoring bills.

Got debt? Join the club. But even if you can’t afford to pay outstanding bills, ignoring them isn’t the answer. Involve your children in a discussion about how you got to this point and about handling responsibilities. Then call the creditors and try to make payment arrangements or get more time to pay. Children should know that sometimes we just have to face the music when it comes to cleaning up financial mistakes, even when that initial call can be gut-wrenching.

5. Fighting about money.

Family fights about money are some of the most harmful. When these arguments go on in front of the children, the damage is multiplied. Both parents should learn to talk calmly about money issues, and show the children the benefits of cooperative problem solving. If you can’t tackle this bad money habit as a couple or alone, don’t be afraid to seek professional help.

6. Living paycheck to paycheck.

Sometimes bad financial habits are born out of necessity. But this doesn’t mean you don’t have important lessons to teach. Use struggles as lessons for your kids rather than staying mum, so they’re more likely to make better choices in the future.

As parents, there’s probably nothing you want more than for your children to do better than you have in life. Helping them learn from your mistakes is part of the process.

To help your children learn the value of a dollar and to get them to start saving at a young age, open a First Step Kids Savings Account right here at First Financial!* There’s just a $5 minimum to open the account and no fees, PLUS they’ll earn dividends on balances over $100. Stop by any branch location and we’ll help you get started!

*As of 12/12/2012, the First Step Kids Account has an annual percentage yield of 0.05% on balances of $100.00 and more. The dividend rate may change after the account is opened. Parent or guardian must bring both the child’s birth certificate and social security card when opening a First Step Kids Account at any branch location.  Parent or guardian will be a joint owner and must also bring their identification. A First Financial Membership is open to anyone who lives, works, worships or attends school in Monmouth or Ocean Counties.

Article source courtesy of Elizabeth Renter of USA Today.