Undeniably, as parents, we all cherish our children and strive to provide the best for them. Yet, it seems like a widespread issue, for us to often channelize our affection by excessively spending money on their needs. A glance at the average parental expenditure will reveal that we often over-indulge by providing surplus belongings, toys, activities, etc.
Our love for our children should not drive us to drain our resources. Here are the three most common financial mistakes that parents make. Are you culpable of any?
1. Overbuying: Showering our children with a myriad of possessions can certainly have negative impacts. It goes beyond just toys. Over-purchasing clothes, books, learning aids, snacks, etc., fosters a sense of entitlement in them. Despite procuring most of my child’s toys and clothes second-hand, I have been guilty of overindulgence. It’s vital for children to appreciate and be content with what they have rather than expecting materialistic gifts each time a festive occasion approaches. Consider reducing the presents they receive for birthdays and holidays, and explain that the savings will contribute to a family outing.
2. Over-Scheduling: Recently, my two-year-old daughter has been the object of many queries concerning her impending enrolment in preschool and participation in dance, gymnastics, or swimming lessons. These added activities may be enjoyable, but they can also create a significant dip in your budget. If your child wishes to partake in an extra-curricular, stick to one per season. For example, let them do soccer one term and piano lessons in another. This approach saves both money and time, relieving parents from undue stress.
3. Lack of Consistency: To excel in parenting, consistency is key, in discipline, education, finances, etc. Sounds simple, doesn’t it? Parenting is an emotional rollercoaster, but inconsistency in managing your finances can indirectly harm your child’s understanding of money. This includes inconsistency in their allowance and your personal financial habits. Flipping between enforcing a tight budget and making spontaneous trips to the ice cream parlor can send conflicting signals. Teach your children the importance of saving for indulgences and that we cannot always afford every luxury.
Kids learn best by observing. Openly managing your finances around your kids can prove invaluable. It might be wise to withhold actual figures from little ones with loose lips, but the basics can be comprehensively taught by allowing them to observe you. Demonstrate a budget and how to save money. This will serve them better in the long run than additional Christmas presents or after school activities.
