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Children learn more from observing their parents than from being told what to do. This is also true for money habits and attitudes. The way parents earn, save, spend, shop, react to a financial emergency, or discuss money matters among themselves are the cues that kids pick up subconsciously. This is what lays the foundation for their own money behaviour when they become adults. So if you want your child to have a good relationship with money, ensure that you do not pass on any money-related anxiety and beware of the following attitudes and actions:
Fights over finances among spouses may be one of the biggest reasons for kids to perceive money as a problem when they grow up. Money arguments in front of kids about each other’s saving or spending habits, blaming a partner for low earning ability or family’s poor financial situation, or disagreements about future milestones will invariably stress out a child. The best way to deal with financial conflicts is to talk when the children are away at school or play. Fix a time every week or month to discuss the issues and, if you can’t resolve them, seek out a financial adviser who can find common ground for your money problems.
When you compare your financial situation with that of a more affluent relative or friend in front of the child, you are inevitably creating unease and unhappiness linked to money in the kid. The child will associate and measure his happiness with the level of affluence he attains, and if he is unable to do so, it will lead to frustration and anxiety. So, never talk about your financial aspirations or another’s affluence with envy in front of the kids.
If you are anticipating monetary problems, such as job loss or salary cut, a medical emergency for which you are not prepared financially, or an unexpected large expense or accident which can put you back by several thousands, it is best not to talk about it in children’s presence. If you do discuss it, and it is advisable to do so if the children are mature enough to understand it, then talk about it optimistically. List a time frame and solutions that will help you tackle the crisis so that the child does not feel helpless and incapable of contributing. If he does, he is likely to develop a high amount of anxiety.
If you are in the habit of taking impulsive spending decisions or making large-ticket purchases without any planning, these are likely to impinge on your budget and create financial stress for your financial goals. Children are quick to pick up these habits and, as adults, will land themselves in the same financial stress and crises that they have seen their parents in.
If you are telling your child that you do not have enough money to buy him an expensive toy, but then go ahead and purchase a costly gadget for yourself, it will send confusing signals to the child. This will not only create a conflict in the child regarding money, but will also cause an erosion of trust with parents. So be consistent in your words and actions when it comes to saving or spending, practising what you are trying to preach to the child.
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