Updated: Jan 21
We all make mistakes. It’s part of human nature! No one gets it right 100% of the time.
However, we must learn from our own mistakes so that we can pass on valuable lessons to our children.
Experience isn’t always the best teacher! You can (and should) in fact learn from other’s mistakes.
Below are 3 mistakes to avoid passing along to your kids and teens to give them a better financial future.
1. Not teaching them how to budget
Everyone, including yourself and kids, should have a budget. We know the term ‘budget’ sometimes gets a bad rep, so let’s use the word “plan” instead. You should have a plan for your money regardless of how much you earn. Having a plan for your money can help prevent overspending and potentially accumulating unnecessary debt. Sit down with your kids and show them how to create a budget. Start by writing down the amount of money that you bring home then itemize your expenses making sure to also pay yourself by saving and investing first!
2. Not teaching them how to save
Our grandparents used to always tell us to ‘prepare for a rainy day.’ Did you know that most Americans could not cover a $400.00 emergency without using credit? Emergencies WILL happen, so it’s always best to set aside a portion of your income in a high yield savings account to access immediately in the event of an emergency. Teach your child or teen how to do the same by getting them in the habit of setting aside a portion of their earnings every time they earn income from their allowance, a side hustle, or their job.
3. Not teaching them how to invest
We can do a disservice to our children and teens when we only teach them how to trade their time for money and only earn active income (ie. going to work). There is absolutely nothing wrong with teaching your child how to go to work. BUT, we must teach them how to invest and show them how to put their money to work! Their money should always be working for them, even when they are not working. Not only have we talked about how your child could benefit from compound interest but we have also shared several accounts that you could potentially open that could even help your child become a millionaire!
Let’s make sure that we are learning from our mistakes and showing our children how to be in an even better financial position than we were!
Need some resources to help you? You can start by downloading our FREE Stock Investment Worksheet and learn the importance of making your money grow together!