Four Financial Mistakes Parents Make

Here's a piece from Smart Money that lists four financial mistakes parents make. Their list:

1. Ignoring their retirement.
2. A bedroom for everyone.
3. Keeping up with the Joneses' kids.
4. Not teaching them about money.

My thoughts on these:

1. We should all consider saving for retirement first and saving for college second. After all, you can borrow for college but not for retirement.

2. Ha! This seems to me more like a comment that people are buying homes they can't afford. Instead, they should be following my formula for buying a house.

3. This isn't just a problem for parents -- it's a problem for all sorts of people. Forget the Joneses. They're ending up in debt and living off relatives anyway. ;-)

4. I agree, but who's going to teach the parents about finances so they can teach the kids? So many parents don't know a thing about personal finance, so where can the kids get GOOD financial teaching?

Comments

[David Robarts]

2. It's more than just buying homes they can't afford. I grew up in a large family and realized that I want my kids to have the experience of sharing a room even if I could afford a house big enough for each child to have their own room. (I hope that I can afford a house big enough that each school age child can have their own desk - a dedicated workspace was always something I wanted growing up.) If children don't share a room growing up, they'll learn to believe they need their own room - preventing them from being able to accept the situation when economics determine that they need to share a room (going away to college).

[My New Choice]

I detailed out each of these mistakes on my site, please stop by if you're interested in more of my thoughts on each mistake.

With regard to #4, when I was a kid it seemed like finances were a taboo topic to discuss with the children so I cannot really say that I learned a great deal from my parents. In our house now, we involve the kids in the family finances and are educating them as they grow.

In my opinion, many parents don't teach their children about finances because they are ashamed of the fact that they struggle with finances themselves. If only they used that as a learning opportunity for both their children and themselves.