Most of the values we develop come from our parents. These include learning the difference between right and wrong, showing compassion or empathy, and developing key principles that we live by throughout our lives. However, some of the traits that we pick up from our parents may not always be ideal and we often don’t recognise this until we are much older.

Research shows that by the time a child reaches their ninth birthday, they have already developed a perception about the use of money, which will often be carried through the rest of their lives (Phelan 2021). It’s never too early for your own personal money habits—and trust me, we all have them—to start rubbing off on your children.

Here are six ways your actions as a parent are influencing your children’s perceptions about money:

  1. 1. Instant gratification
  2. All parents have been there: you’re at the checkout and your child is begging and pleading for something in the store and, instead of saying “no” and sticking to your guns, you buy it so you don’t have to deal with the brewing 3-2-1…meltdown. Unfortunately, the problem with giving in to this impulse is that you’re teaching your child that their wants are just as important as your needs, which, when you really think about it, is not something you want to reinforce. A lot of bad money habits develop in people who are unable to distinguish between wants versus needs and who don’t understand the value or purpose of money.
  • 2. Congratulating without reason
  • Have you ever heard of a working parent receiving a promotion for doing nothing but their job description or receiving an award just for showing up to a board meeting? The reality is this: overpraising a child for doing what they should be doing leads a child to think that the bare minimum is acceptable. A child needs to learn that in the working world, if they want to hold onto a job and the money that comes with it, it’s not enough to simply show up; organizations need to see that your contributions are benefitting the overall success of the business. It’s important that children learn that working hard is a key attribute to financial stability.
  • 3. Relying on credit cards
  • How easy is it to whip out your credit card to pay for everything from lunch box snacks to diapers to childcare fees? While it might be convenient, the habit can rub off on your children more easily than you might think—the childhood equivalent of a credit card is having mom or dad buy whatever they want, particularly if they have already used their allowance. It teaches your children that it’s okay to live beyond your means and that a credit card can cover the difference. What they don’t see is mom and dad arguing about the huge credit card bill and only being able to afford the minimum payment each month, along with the 29% in interest.
  • 4. Expecting money for nothing
  • Handing out pocket money is a tried-and-true method to motivate even the most difficult of children to help with chores. Following through to make sure they are completed to your satisfaction is the key ingredient to an essential life lesson: developing accountability. If you provide your children with pocket money but don’t follow through, your children will not learn to appreciate the link between money and hard work. When this happens, in essence you’re financially praising a child for not completing a task and, let’s be serious, in the working world we all know that no employer is going to keep an employee who can’t do their job.
  • 5. Fearing debt
  • Nobody likes being in debt and it can be hard not to let this attitude rub off on children, especially if you’re anxious about making repayments or the rise of interest rates. But, if your children are scared to death of borrowing money, they’ll also miss out on understanding some of the benefits of doing so. Many of us have had to borrow money from the bank at some point to buy a home, pay for university, etc. Borrowing money for the right reasons and learning about the discipline of debt management has its benefits. Creating a budget, living within your means, and paying back what you owe in an agreed time frame, are all valuable life lessons in money management.
  • 6. Keeping quiet on money matters
  • When little ears are present, it’s tempting to avoid talking about the family budget or how much money you earn, particularly if things are tight. You might do this with only the best intentions, but keeping quiet about your financial situation not only means that your children don’t get experience in money matters, but it also puts the idea in their heads that money is some big secret, which might stop them from seeking financial help should an issue arise in the future.

Parenting is one of the toughest jobs out there and our role as the adult in the equation is to always lead by example—how you view, manage and use your money will have a direct correlation with how your children will ultimately handle and work for theirs.

Carla Seely is the Chief Operating Officer at Freisenbruch-Meyer. If you would like any further details, please contact or call (441)297-8686

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