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That Impulse Buying Is Normal, and 9 More Money Mistakes You Might Be Passing on to Your Kids

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They say that kids will do as you do and not as you say, and even though my kids never pick up their toys even though they’ve been watching me do it for years, let’s go ahead and assume it’s good advice for the things that matter.

One of the toughest things for people to learn on their own is how to be good with money – if no one taught you how to effectively handle money and build wealth, chances are you’re still making mistakes that your kids will make, too.

If you want to try to change the future, here are 10 mistakes you should stop making as soon as possible.

money and budgeting expert Andrea Woroch.

10. It’s not worth their time to look for a deal.

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Our society is one of instant gratification, and it can be easy for children to decide that it’s not worth spending time looking for a better deal on something you want or need.

Andrea Woroch, a money and budgeting expert, says she thinks that’s a missed opportunity. Letting them look for coupons or discount codes online is a good way to start.

“You can even turn shopping into a game, having them look for cheaper options and then use a cash-back app like Fetch Rewards and have your kids take pictures of your shopping receipts to earn points good toward free gift cards to stores like Amazon or Target.

Then let your kids redeem those gift cards to get something they really want.”

9. That money grows on trees.

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Teach your kids early that money doesn’t just appear – it has to be earned with a job and a paycheck.

Tim Sheehan, co-founder and CEO of the family-focused financial literacy app Greenlight, has some ideas on how you can do that at home.

“It can start with something as simple as a chore. This helps kids make the connection that, ‘If I do this work, then I’ll earn money.’

Then, kids can set a saving goal and work towards it. It teaches them about making real-world trade-off decisions instead of giving in to instant gratification.”

8. Your financial situation will never change.

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Woroch warns that “families who are on a tight budget may talk about what they can’t afford often instead of trying to figure out how they can afford it. This limiting view gets passed down to children who may feel like they too are stuck in the income they earn and never break the rut.”

Now more than ever, finances are dynamic. There are a million side-hustles and opportunities to improve our education and training, etc.

Jim DeGaetano, president of Diamond Wealth Advisors and author of Larry the Bunny Saves His Money,” says there are plenty of ways to model positive behavior, even through play.

“When I would play ‘kitchen’ with my daughter, she would be the restaurant owner, and I would have play money to purchase the wonderful food she was ‘making,’ but sometimes Daddy did not have enough money to pay for it.

My 4-year-old son loves his cars and trucks, and sometimes the trucks had to go over a toll bridge, and I was the operator. The ticket to pass through the bridge cost money.”

Basically, take the opportunities to talk to your kids about money. The more they see something happen, the easier it will be for them to understand it.

7. That only grownups need to know about money.

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There are plenty of ways to bring the conversation of money and finances down to your child’s level. If your kids are slightly older, financial expert Kim Kiyosaki suggests something like starting a small business like mowing the neighbors’ laws, selling something online, a lemonade stand, etc.

“It’s key to learn the language of money. Kids can learn things such as income and expenses, profit and loss, cash flow, inventory, marketing, and the value of their time.

This is hands-on, and it’s fun. And the learning is tremendous.”

For older kids, you could be a few shares of stock in one of their favorite companies in order to teach them about the market, and always have them help brainstorm ways to buy expensive items they’re eyeing.

6. That credit cards are bad.

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For many of us who are part of Gen X and the Millennial generation, we grew up watching our parents mismanage credit cards – and we’ve probably gotten into trouble with them ourselves along the way. This can lead us to eschew them, and to teach our kids they are inherently bad, but Woroch says that’s a mistake.

“…You can get your child a card with a small balance and have them help you manage the account every month so they understand why paying the bill in full and on time is important and that you don’t charge things you can’t afford.

Otherwise they may fall into the trap of getting a card when they’re living on their own and dig themselves into debt, afraid to tell you about it since you cautioned them against it.”

Financial advisor Nicole Smith Jackson says it’s important that kids understand the power of good credit, how to build it, and to not fear using it to their advantage.

5. That talking about money upsets people.

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If conversations about money get tense in your house, it can affect the way your kids view money and talking about it ar into the future. And while money can obviously be a source of anxiety for everyone from time-to-time, it’s important to check how much you let it affect you emotionally.

Financial therapist Amanda Clayman says there are ways to pass on healthier attitudes to your children.

“A lot of bad spending behavior is related to a need to emotionally self-regulate. You’re feeling stressed, and your brain is like, ‘I need this thing!’

It becomes an obsessive thought. But you can recognize that you’re having a feeling, which is triggering you to want to buy the thing.

So ask, ‘How can I come back to my intention for my money and soothe myself through this feeling in a way that doesn’t involved shopping?'”

4. That saving is always the most important thing.

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There is no doubt that saving is important, but it’s also necessary to be able to use the money you’ve put away to enjoy your life, and also, investing can be a better, if riskier, way to grow wealth.

Experts like Kiyosaki advise teaching kids how to grow money, and also when and where to spend it – and to let them know that everyone makes mistakes or bad calls now and then.

“The problem with avoiding mistakes is that kids come out of school scared to death of making a mistake.

In reality, the way human beings are designed to learn is by making mistakes – and learning from those mistakes. So, reading and studying is part of learning, but it’s been proven that the best way to learn and to retain what you learn is by doing the real thing.”

3. That impulse buying is normal.

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Woroch says one of the worst things you can teach your kids is that they should get a shiny thing they see for a split-second while you’re out shopping for something else.

“If you’re constantly buying your child a toy, you’re passing on the habit of impulse shopping. Instead, think of this as a teaching moment.

When my daughter asks for something new, I talk to her about why we went to the store in the first place and that toys were not on our shopping list.

If there’s something she really wants, we talk about how that can be a Christmas or a birthday gift and that we will keep a list of her wants to consider in the future.

The occasional splurge is OK, just don’t make it a habit.”

DeGaetano adds that it’s our job to teach our kids how to navigate this brave new “I want it now” world, and says it’s ok to tell kids you’ll have to save up for a particular purpose.

2. The same rules work for everyone.

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Everyone is different, and so there are no set of rules and guidelines that will work for absolutely everyone, says Clayman.

“Battling around who’s correct or incorrect reinforces rigidity and that there can’t be compromise, that both people can’t have a legitimate point of view.

This is a destructive misunderstanding to have about money and how it works.”

You have to figure out what’s helpful and the best teaching tool for your particular child(ren).

“I think it’s really helpful for parents to help children see that they can hold space for those kinds of dilemmas and identify their values and what’s important to them and how money is helping them live those values or getting in the way. Rigid ideas of right and wrong things to do with money is an unhelpful framework.

We face money dilemmas and take on risk in our financial choices all the time. We take on student loan debt or move to an expensive city on an entry-level salary. But that’s an investment in your future and the kind of life you want to live.”

1. That wants and needs are the same thing.

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There is a difference between food and shelter and toys and candy, and it’s not enough just to talk about the difference – you have to model it, too, says Kumiko Love, a financial counselor and creator of The Budget Mom.

“You can’t teach your child the difference between needs and wants, or even the value of saving, if you are continually swiping a credit card for everything.

One of the biggest mistakes we can make as parents is not improving our own habits and skills around financial management.”

That said, Clayman said kids are kids, and they shouldn’t be shamed for their wants.

“What often happens is a child says ‘I want this $100 sweatshirt,’ and a parent is like, ‘That’s so selfish of you to want that. That’s a waste of money’ – as opposed to just ‘That doesn’t fit in our budget,’ or “We put our money toward other things.'”

Or even saying “if you really want that, let’s figure out a way to save up the money.”

This is a great short list of errors to correct, don’t you think?

If you can think of another common mistake, share it with us in the comments!