So you didn’t get the raise you were expecting at work - now what? You are not able to make the next car payment, or pay off that credit card this month. No big deal? Think again - money decisions should not be taken lightly because they affect more than just you - they have an influence on your child’s future.
Like it or not, your children imitate your way of life more than anyone else’s. They learn their basic lifestyle habits in your home, and pick up on opinions/ideas from you. While this is a huge responsibility, it is important that parents don’t take it too lightly - you need to teach your kids the best way to live their life by learning from your mistakes.
Here are 5 money habits you shouldn’t pass on to your kids:
Option for Store Credit Cards
Almost every store offers them, and everyone you know gets them. It’s time to put a stop to this bad habit because it ends up reducing your credit score in the long run. The more times it is checked, the less is becomes. In addition, purchasing, or worse splurging, on your store credit card gives your children the message that you can still get stuff even when you don’t have cash. While it’s okay to buy stuff from your store credit card, it is best not to make a habit of it!
Delaying Bill Payment
Sometimes paying bills on time can be difficult - however it is imperative that you don’t make a habit out of this. If your kids see you scrambling at the last minute to pay off bills that are covered in red ink, then you are setting a bad example. Try to get the bills paid on time, preferably early in the month, to show your children that it is something that is urgent and must be done on time.
A Loan to Pay off a Loan
Almost everyone has a mortgage, car payment or business loan - but not everyone is on time with the installment payments. This is similar to paying off your bills - just do it on time! When you think that you can’t make the next payment, ring your bank and ask for alternative solutions. Taking out another loan to pay off installments is never a good idea - because then you create a bigger problem than you started with.
Maxing Credit Cards
Just because you have the option to have an overdraft and buy without having any actual money, doesn’t mean that you should take advantage of it. By maxing out credit card after credit card, you are showing your kids that there is no end to consumerism and they can buy anything they want - as long as they get approved for a credit card. This habit can start as early as university, when you kids are will be independently managing their funds for the first time. Set a good example by making your children aware overdrafts, interest rates and how the banking system works.