A blog written with parents in mind
Don't Be Afraid to Talk About Poor Money Habits With Kids
To no surprise, parents’ spending behaviors and overall financial history, good or bad, influences kids’ money habits. Understandably though, past financial missteps can be sensitive topics that parents are hesitant to talk about with their children. The 2017 Parents, Kids & Money survey shows that 69% of parents have some reluctance to talk about money with kids. But the parents who have declared bankruptcy are more than twice as likely to say that they are very or extremely reluctant to discuss finances with their kids compared with those who have not declared bankruptcy.
These parents’ lack of transparency directly correlates to kids confusion and early, poor money habits. 76% of children whose parents are reluctant to reveal certain information regarding bankruptcy or credit card debt say they are confused when their parents talk about money. This also directly impacts kids’ personal financial habits. Kids who are unaware of their parents’ poor financial history are more likely to spend their money right away, expect to receive what they want from their parents and lie about their spending habits.
While there are plenty of ways to show children how to spend money correctly or budget appropriately, revealing these truths can alleviate these assumptions or actions and guide kids toward smarter money management. Starting the conversation early, with child-friendly terms, can help kids start a strong foundation of financial knowledge. Parents who are open about bad habits or money mistakes present an opportunity for their kids to understand the consequences that may arise because of poor money management and that can ultimately lead to a better, more stable financial future.
And the impact of having these conversations? Kids are more likely to say they’re smart about money. Bad habits or good habits, children will benefit from listening and talking to their parents about avoiding money troubles.