Whether we want to realize it or not, the way we were raised has a tremendous impact on how we make decisions as an adult. April is Financial Literacy Month and Alpine Bank wants you to consider the negative financial habits that you may unintentionally be teaching your children.
Did you know most children’s financial habits are formed by age seven? It’s widely known that children pick up on words, dress style and food habits at a young age, but it hasn’t been predominantly communicated that financial habits were on the list of precautions to take when around children.
Children under the age of eight years old may be able to count and recognize money, but it’s suggested that they do not have an understanding of the difference between “luxuries” and “necessities”, meaning they see items, not the amount of money spent to purchase them. It is crucial that financial education starts at a young age.
Here are three common parenting behaviors that can negatively influence children’s money habits.
- You Spoil Your Children: Your child may expect that they can and should still get whatever they want when they grow up. The problem is they may not have the income to support the ability to live large. Challenge yourself to put money in a savings account for your child instead of giving them games, clothes and toys.
- You Make Financial Decisions on a Whim: Go out for dinner? Sure. Go see a movie? You bet. Go shopping for new clothes? Why not? If you are always saying yes to questions that involve buying something, you are showing your kids that financial decisions should be made without much thought. Sure, it may be fine to go out for dinner tonight, but explain to them that this means they’ll have to sacrifice that movie night later in the week.
- You are Very Frugal: Whether you need to keep a tight budget or you are a penny pincher, this money saving tactic could potentially affect your child’s spending habits in the future. It has been shown in a few studies that excessive spending can be a side effect of living an extremely frugal childhood. Talk to your child and explain the reasoning for being careful with money so that they can learn the benefits of saving and not feel resentful.
Since children learn a lot from their parents, Alpine Bank wants you to celebrate Financial Literacy Month by improving your financial habits while educating your children on how to stay financially successful. Make a commitment to help your child grow into a financially independent person this April.