Mistakes about Money Matters That Parents Tend to Make the Most

Right from the day, the new baby arrives in the family or even before that, every parent starts to dream big about their child. They want their kids to do well in whatever they do but most of all; they desire them to live satisfying and happy lives. However, raising a family well requires far more than big dreams and well-intentioned acts; it demands proper planning, which is all too easy for people to forget about when leading hectic lives from one day to another. 

Again, some parents are so committed to the development and wellbeing of their offspring that they end up sacrificing their happiness. However, it does not have to be always that way because, with a little foresight and planning, you can avoid making the most common errors in money matters. Some tips to learn from:

Binging on Fancy Baby Stuff

When you step into a baby store, your eyes are bound to pop seeing the amazing range of stuff they have, right from clothes, to baby carriers, strollers, games, and gadgets to really fancy beds, paint jobs, lighting, not to speak of swings and furniture. As you can well imagine, most of the stuff carry fancy price tags because marketers know that for the indulgent parent, nothing is too fancy or expensive. If you are sensible and have the best interests of your child at heart, the best thing to do is to walk straight out of the store and scour Craigslist for used stuff or even ask family and friends for stuff they can spare. Babies grow up fast and you do not want to throw away thousands of dollars’ worth stuff just for a few months of pleasure. Rather, the wise thing to do is to start saving money for more major expenses around the corner that are an inevitable part of bringing up kids.

Not Having Adequate Life Insurance Cover 

According to https://www.thestreet.com, only about 60% of Americans have some form of life insurance cover. Even for those who are covered, a New York Life Insurance study discovered the average cover is only three times the salary, even though personal finance experts recommend that it should be in the region of 10-20 times of your annual income plus the current annual debt that you are carrying. It is easy to see how inadequate funds can compromise the quality of their lives, the ability to participate in school activities, and study in a college of their choice. Not buying adequate life insurance can burden your family and irreversibly damage their future. 

Setting a Poor Personal Example

One of the most common parenting mistakes that people make is failing to appreciate that their current actions will have a major impact on the future financial success of their children. According to one financial expert, children end up mimicking their parent in ways more than one. This means that if you have a habit of living from one paycheck to another and have run up huge credit card debts, it is quite likely that the children will also follow suit with a similar lifestyle when they become adults. Rather than credit card debt dictating your life, it is better to go in for debt consolidation or debt settlement with the help of a reputed agency. Set an example by creating a budget and scientifically allocating your resources. If the kids are old enough, involve them in the process so that they become aware of how budgets are made and how to stick with them.

Spoiling the Kids

It is but obvious that every parent will want the best for her child, however in a society that is marked by extremely wide economic disparities, it can be a good idea to restrain yourself and not give in to demands that your financial status will not permit. Demands for expensive toys and gadgets that your child has seen that his friends have should be countered firmly and with a proper explanation so that your child does not end up being traumatized by the parent’s unwillingness to please him. If you train your child not to lead a life dotted with excesses, they will grow up to be more rational and stable individuals better equipped to handle their affairs as adults. It is important to explain to them that instant gratification can only set them for a lifetime of discontent and unrealistic expectations. 

Not Imparting Financial Education to the Kids 

It is vital for every child to learn to use money responsibly. Rather than letting them grow up and find out that they are hopelessly ignorant about one of the most important things in life, you should take the initiative to teach your kids what money is, how they can earn it, what they can do with it, and how to ensure a secure financial future for them. Simple tasks like budgeting, writing out a check, using credit cards and paying off the balance can become a horror story if they are thrown off the deep end one fine day all of a sudden. Start teaching them simple financial concepts even when they are very young so that they know how to earn, save, spend, and share money. By the time they enter their teen, they should be comfortable about all the basic concepts of money, spending, saving, and investing.

Not Starting to Save For College on Time 

That college tuition in America is expensive and becoming more costly every day is an understatement. While there are lots of valid reasons for this state of affairs, however, none of them can change the fact that the child will have to bear the cross of a higher education loan simply because as a parent, you did not start to save early enough. You can expect college tuition and fees to double in less than every 10 years, which means that you need to start saving right away because otherwise you will be caught completely underprepared. 


Money is a sensitive matter and misusing it can cause an enormous amount of grief. It is important to set a proper personal example, teach monetary concepts early on, not to pamper kids too much, as well as start saving for their financial future while purchasing adequate insurance cover to protect their future needs in your absence. 

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