Parents behaving badly

The concept of ‘monkey see, monkey do’ is alive and well in Kiwi families, and that includes when it comes to our parents’ habits with money. When parents behave badly with money, guess what their children do?

As a parent, your role modelling is one of the most powerful indicators of how well your children will survive financially. Whether your children are two or 20 you can set them a better example.

Don’t see money and spend it

Do you see money and spend it? Is HP your friend? As a parent it’s your duty to educate your children about the difference between needs and wants. If you buy what you want when you want and call it a need, your kids are probably going to turn out poor. Show them how it’s built into the budget.

Build a career

Not working can send the wrong message to your child. Even if you can live on benefit, your spouse’s income, or investments, you might want to consider the effect this has on your child and their earning potential. A career is one of the four pillars of wealth. Yes, it’s great to have a parent at home during the younger years, but you don’t want your daughters in particular thinking that a man is their financial plan? That really can end in tears. Volunteer roles are valuable. But paid work sends a clear message to the next generation.

Avoid big barneys

When mum and dad fight over money it sends all sorts of awful messages to children. They may see money as stressful. Or that money is a source of power. Sit down and work out how to move forward united. That may mean giving each other monthly ‘his and hers’ money built into the budget.

Turn them into adults

One of your jobs as a parent is to turn your children into fully functioning adults. Yet we breed ‘kidults’ who don’t fly the nest. Or they turn into kangaroo kids that keep bouncing back home.

Start young

Give them regular pocket money from a young age in return for some chores. But if they misuse that money don’t replace it not matter how much your heart is breaking. Advise teens on the art of budgeting and encourage them to pay their student loan back as fast as they can. Beware of funding every cent of university, and think twice about going guarantor or providing the deposit for their first home. ASB’s website has more advice on starting kids young.

Don’t buy top of the range

We don’t want our children to miss out, but buying top-of-the-range everything sends bad messages. Make them work part time and contribute to their toys and gadgets.

Talk more

Life is busy, but if you take the time to discuss money over dinner, in the car, at the beach or whatever suits your lifestyle, you will help your children think before spending or borrowing. Each family has its own financial strategy. When we took our big overseas trip as a family the topic of our holiday budget came up more than once. For example, we ate most meals in our apartment in the evenings, and bought lunches in the market during the day. We also talked about how our relatively frugal lifestyle at home meant we could pay for the holiday from savings, which cost less than doing it on credit.

Watch your language

So you’re going to ‘invest’ in a new car, a new kitchen, or an extension to the house. Beware of using language that makes children think this is good spending. The reality is you’re buying the car because you want a better one, not need it. You didn’t choose the kitchen or bathroom for their return on investment. And you didn’t do a business plan or spreadsheet that proved it increased the capital value. You chose the design of your dreams – or the nearest to it you could afford.

So let’s all be good parents and think before we talk, act, borrow and spend. If we want our children to be better financial citizens we need to buck up our ideas ourselves. That way they won’t be hounding you for money for the rest of your life. Hopefully!