It’s impossible to know the future and it’s unfair to your kids, who may well surprise you in their financial future to take any of the following red flags too seriously. In saying that some of these red flags are worth paying attention to and possibly changing some of your habits to instill new ones with your child.
So if you are in credit card debt, or have no savings and often think what have I done wrong and your kids keep demanding more and more stuff. Well you may want to listen in to today’s show.
Red flag: Is your child is easily swayed by television commercials and friends’ opinions. If he or she sees something cool, he or she wants it?
This could mean: Your kid will be an impulse shopper.
Possible solution: That may not be so bad, of course, but it all depends how often your kid impulse-shops.
If your child gets an allowance, and you’re out shopping, consider letting your kid put the first thing in the cart, even if you know it’s stupid purchase. Then continue shopping, and when he or she wants something else but doesn’t have the money to buy it, this can be that teachable moment. It’s an especially useful exercise in, say, a toy store, where there are plenty of items your child wants.
And, of course, if you feel sorry for the little guy or gal and you really hate the thought of that allowance money being wasted, you can always then teach your child how some stores have return policies.
Red flag: Your child is always forgetting to do homework or give you important school papers.
This could mean: Your kid is going to constantly pay bills late.
Possible solution: Yes, you might want to get your child a calendar, or a better one, to help him or her keep track of important school dates and hope that leads to better grades, a good college, a decent job and salary, and someday, better money-management skills. That said, when it comes to teaching your child about money, the most important thing is to simply talk to your child about it.
Last year, the American Institute of Certified Public Accountants released a survey showing that children are, on average, 10 years old when their mom or dad has a first financial conversation with them about money.
Red flag: Your kid seems to make a lot of rash, even stupid, decisions.
This could mean: You can envision your future adult son or daughter buying a very expensive car that they can get a loan for but can’t really afford—and then hitting you up for money.
Possible solution: Consider keeping track of all the money they get throughout the year, including birthday and holiday money. At the end of the year review how they spent that money.
Not only is it educational for his kids it is educational for you the parent.
Red Flag: Your child throws a temper tantrum when he/she doesn’t get what they want.
This Could Mean: Your child will become entitled and expect to get everything they want when they want it. AKA: Spoiled Rotten as my grandma used to say.
Possible Solution: Discuss needs and wants. Before going to the store have the child list out things they may need and things they want. Create a budget before going. Example: Let’s say they have $10 to spend. You get to the store and the item is $15.00. Give them the choice of saving their money now for what they want later or choose a different item.
If they child throws the tantrum a pediatrician once said to me,” During a tantrum your child is literally out of his mind. His emotions are taking over the frontal cortex of his brain. This is the area of decisions and judgment. That’s why reasoning with them in the moment doesn’t work. Remember when someone is drowning you can’t teach them to swim.”
Give clear explanations instead of just saying “no” and reviewing the plan that you both agreed to before going to the store will begin teaching your child holding to agreements and being a person of his/her word. Keep in mind you don’t have to give a long winded explanation, but just simply provide the reason for your actions will help the child make sense of things and feel more in control of the situation.
Example: Let’s say he/she wants candy. Remind him/her that you have already put in the cart his/her favorite ice cream and fruit in the basket so there is no need to buy the candy too.
Have a talk about the experience when he/she has calmed down and you are calm. Remind them about gratitude of what they have already and how much you love them and then hug it out.
Notes to self: Make note of the time of day you went to the store, be aware of if your child was hungry or tired. Consider taking them to the store when you are confident they have had enough sleep and to eat.
The theme: Just talk to your kids. Yes, there’s a pattern emerging in all of these scenarios. Any reputable personal-finance expert will tell you that the best way to keep your children from someday making colossal financial errors as an adult is to openly discuss money issues with them.
Keep in mind if you force your children to save all of their money and never have any fun buying anything. If you don’t allow them to have a little fun with their money, once your children have the freedom to buy whatever they want, whenever they want, they just may. We are in the business of raising responsible adults it’s not to late!
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