Three Money Mistakes Parents Make

Kiplinger's list three money mistakes parents make as follows:

1. Caving in to kids' every request -- and then some.

2. Neglecting to give kids guidance on managing money.

3. Failing to make kids work for their money.

My take on these three:

1. We do not cave in to every request by any means, but every parent knows how often kids ask for stuff and how difficult it is to say no in some cases. We're probably better than most at saying no, but we still have our challenging times.

2. Our kids have a lot of financial guidance -- and will get more as time goes on and they can handle/understand it.

3. We have a two-tier system in our house. Level one contains tasks that are done simply because you are part of the family (doing wash, vacuuming, mowing the lawn) while level two is made up of tasks that the kids get paid for (an extra big snow shoveling project, special clean up projects, etc.) It's never very much money (our kids are still impressed by a few dollars) and seems a reasonable way to reward them for hard work and show them a real-life association between work and money.

Comments

[Caleb Nelson]

The most important tab here is number two. When your kids want something, it is a perfect opportunity to teach your kids the different ways of earning money. Without this lesson, kids are destined to do what the average person does and earn 100% of their income through employment.

Caleb

[Shaun Connell]

I suppose I was lucky enough for our family to have a family business. All work at the house was considered a "given" and wasn't monetarily compensated; all work at the business was considered extra and I was paid minimum wage for it.

Needless to say, it didn't take long before I discovered that work = money, which was the best financial lesson I've ever learned.

[Rick]

I'm a firm believer that parents should teach their kids (older kids, that is) about the dangers of credit. Credit is why our economy is collapsing.

My kid has a red square piece of plastic that she got with some toy, and my mother-in-law, who spends like there's no tomorrow, saw the plastic, thought it was an old credit card and said "a girl after my own heart." I almost gagged.

We need to teach our children to live within their means, which to me and my wife means if we don't have it in cash, we don't spend it.