Finance plays a major role in any household and what elders follow in finances will have a major impact on their kids financial future. So, it’s the responsibility of the elders to set a good example for their kids in terms of financial issues and habits. Here are the five financial habits that elders follow which may have a bad effect on their kids financial future.
Spending money is not a sin, but people should always think twice before spending a penny on unnecessary things. They should draw a line between what is necessary and what is not. The unnecessary and the luxurious things that you afford beyond your financial condition may cost a great deal by impacting your child’s future.
Unnecessary expenses may include the things you buy by comparing yourself with others or the things that are not a part of daily necessities. Doing this way may make the kids think that money can be spent recklessly without giving it a second thought which is not healthy for their financial growth as that may have a direct impact on the way they save money in the future.
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Not having a budget
Budget maintenance is one of the important factors to keep in mind while planning the finances. All your sources of income and expenses should be taken into consideration while making a proper budget and a budget always keeps you in control during your expenses.
Not having budget makes the kids feel that the calculated approach is not necessary while handling with money. It also creates an ambiguity within them regarding management of income and amount of money spent on daily expenses when they hit their adulthood.
Being a miser
Spending lavishly and being a miser are both sides of the same coin that might show a bad effect on your kid’s future. It’s good to save money but overdoing anything will have its own repercussions in the long run.
While spending lavishly creates carelessness among kids, being a miser sows seeds of unhealthy savings in their brains which makes them over save their money even in the times of absolute need or necessity. So, a balanced approach is always advisable while dealing with money to reap good financial benefits.
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Giving them whatever they want
Pampering kids is okay, but that turns as a poison if parents buy everything their kids want them right away. Purchasing whatever they want irrespective of the situations at home develops a sense of disconnection among the kids towards the financial situation of the home and makes them adamant to have what they want irrespective of the financial needs and deeds of other family members.
This habit also creates an image in the kids mind that they can be relaxed and lazy and anything they want can be obtained without a healthy effort towards it. This may lead them nowhere when it comes to financial issues as they spend money on whatever they want without giving it a second thought.
Not discussing finances at home
Money is the cause of all livelihood at a house and thus the finances right from daily expenses to the loans and debts should be discussed- at least once in a while with the people in the house be it with life partner, elders etc., Kids observe everything and not discussing money matters and financial decisions with people at home makes them come to a conclusion that any decision regarding money can be taken alone and inclusion of family is not necessary for it.
Also, not discussing money matters, savings , investments at home may leave your child with zero knowledge about financial planning and manageable skills at home in their future.
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As there goes a saying “ your child will follow your example, not your advice”, it’s your habits that you follow and the ways that you implement in doing things that inspires your kids to lead their future. So, avoid the habits that are mentioned above in order to pave a good financial path for your kids.