Six Mistakes Parents Make When Teaching Their Kids About Money

Six Mistakes Parents Make When Teaching Their Kids About Money

Six Mistakes Parents Make When Teaching Their Children About Money

  1. Thinking You Have Time To Save For Retirement

Parents can often tell their children that they have plenty of time to start saving for retirement. While this is true, it is also important to start early. Once they start working, their expenses are low and they have 40-50 years ahead of them. This becomes a mistake when they see no urgency or motivation to start now.

Saving earlier allows their retirement nest egg to grow over a much longer time. Being diligent when you are in your earlier years can pay huge rewards down the road. From an early age, stress the importance of saving for retirement, even in small amounts. Especially when they do not have children or own a home. This can help your child build good saving habits, retire earlier and retire more comfortably.

  1. Over-Borrowing For Student Loans

A college education is expensive. With student loan debt rising to unfathomable amounts, parents need to have this conversation with their children early. Even if you are helping them with the tuition bills, go through the tuition costs and what their potential student loan payments will look like after graduation. Analyze their career choices along with entry level salaries in their field. Help them gather the information they need to make an educated career and financial decision. Sometimes the cost of a certain college may not be feasible for them. Encourage them to look at scholarship opportunities or consider other universities that are more affordable.

You don’t want them getting in over their head with student loan debt. Walk through the process together and help guide them on future financial responsibilities.

  1. Saying One Thing… But Doing The Other

Children don’t always do what their parents say. They are more likely to follow what a parent does because that is what they see every day. If you want to instill good financial habits in your children, don’t habitually do the opposite of what you are telling them to do. If you want them to understand the concept of “living beneath your means”… live beneath your means. If you are living an overly lavish lifestyle that puts yourself in financial turmoil, what would you expect them to do?

  1. Taking Care Of All Their Finances

As a parent you want to be able to provide for your children. You try to support your children. Sometimes the thought of your own childhood and things you weren’t able to have or do creates a sense of obligation. But taking care of all your children’s finances from their car, gas, car insurance, clothing purchases, cosmetic or beauty products, shoes etc. needs to wind down at some point. How will your child learn what hard work and earning money can help them do?

Once they begin working, even on a part time basis, you can begin having them pay for some of their own discretionary expenses. Things that they want, but don’t necessarily need. Once they begin seeing the prices, paying these bills and realizing the value of a dollar, you may see a change in their spending habits. That is a lesson that will help them become a more financially responsible adult.

  1. Just Put It On A Credit Card”

The whole idea of credit cards can be misleading to children. Credit cards can be a safe and secure way to pay for purchases, as long as it is done correctly. As a general rule, try not to buy something on your credit card unless will pay it off entirely when you receive the bill. This will help you to avoid over spending, pay the entire balance when due and avoid those high interest charges.

The whole concept of a credit card seems magical to young kids. If Mom or Dad wants to buy something they just swipe, sign and take the item home. It is paid for. Children don’t always understand how a credit card works. Have a conversation with your children about how a credit card works. The more they understand, the better. Credit is a good thing, when used properly.

  1. Avoiding the Conversation

One of the most frequent comments surrounding children’s education about money is, we never talked about it. Money is not a topic you should avoid with your children. Certainly there are situations where too much information can be shared given the child’s age. You don’t want to scare your children if you are struggling financially. But you should share with them that working with money or a budget is about making decisions.

Is this purchase something that we can afford? Is it something that we need? Or if we can afford it, is it just something that we want? By helping your children differentiate between wants and needs, good value and quality, you will be helping them become a better consumer and a more responsible member of society.

Have conversations around good financial habits and the realities of the world. Once your children are old enough to understand, they will thank you.

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About The Authors


Keith Maderer has been a Financial, Investment and Tax professional in the Buffalo-Niagara region for over 30 years. He helps individuals and families to Clarify their needs and goals, Solve their problems, and Simplify their life to avoid the common pitfalls that get in the way of enjoying life and retirement.

He is an author, an entertaining and humorous speaker that enjoys captivating audiences with stories, anecdotes, and messages that inspire and motivate others to achieve their goals.

He has been married for over 30 years and has 5 adult children which contributes to his great sense of humor. For more information please visit:, or or visit his Amazon Author Page.


Chelsea Maderer is a Financial, Investment and Tax Advisor in the Buffalo-WNY region. She helps individuals and families to Clarify their needs and goals, Solve their problems, and Simplify their life to avoid the common mistakes that get in the way of enjoying life and retirement.

For more information please visit:

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