If you are a parent you will agree with me that hardly a day passes without you thinking of your child’s future. While we sit there building castles in the air and thinking of how to chart their way into prosperity, we are unaware of the fact that our actions in the present can affect their future.
This is in all aspects namely morally, spiritually, emotionally and financially. Let us look at how our actions today can affect the financial future of our children.
- Having too many debts
In some households, the problem of having too many debts is often caused by the inability to stick to a budget or failing to live within your means. In some cases, a family will sink into debt because they mismanaged their funds and that is quite bad. There are unfortunate incidents where a family is grappling with the sickness of a loved one and this drains their finances and lads them in debt.
In the latter case, there is not much you can do about it. But the other instances are avoidable if you want to secure your children’s future in case of your early demise.
If you keep paying debts then your children will think that it is okay to be extravagant and keep buying things they cannot afford. They will also land into debt when they grow up. Debt is also known to cause stress and anxiety which may plague your child as an adult as well.
- Being an impulsive buyer
I suffer from this one and it is not easy to stop. I have resorted to sorting out my bills using mobile money to keep temptation at bay. Impulse buying can render an otherwise good budget useless and heavily impact on your goals.
If you go out frequently, have far too many vacations you will not be able to stick to your budget. You will end up giving up on your goals or having to do without necessities.
If your child learns this habit from you then they will have a problem regulating their finances in the future. They may find themselves running out of money before the end of the month. This, will, in turn, increase their dependence on loans which will just compound their financial woes.
- Being a heavy spender or being too frugal
Parents who are known to be heavy spenders and fulfill every demand by their children are actually failing their children as far life lessons are concerned.
Life does not always go the way we want and of the child does not have an affluent life in their adulthood they might end up getting frustrated, sink into debt or turn to crime to get what they want. If children keep getting what they want then they will never value the stuff they get in their lives.
On the other hand, if you are frugal with your finances your children may try to compensate their childhood by splurging the minute they start earning their own money. This may distract them from investing their money or saving it to accomplish their goals in life.
- Not being charitable or too charitable
It is always good to give back to society. This can be to individuals or to charitable organizations that need help. It is always good to show children that they should help the less unfortunate in the society. If parents do not engage in charity then their children may not do it as well. You should, however, be careful about excessive charity as it may affect your ability to balance resources and cause you distress.
- Fighting over money
It is not good to argue over money in front of your children. This is because as adults, the children will not want to discuss money issues to avoid fights. They will also not want to manage the family’s finances. This is so as to avoid being blamed in case of any problems arising from their roles.
6. Not distinguishing needs from wants
Most people fail to distinguish needs from wants and this has caused problems for many families. Needs include health, food, shelter, transportation, and clothing. They are basically things that you cannot do without.
Wants, on the other hand, are luxuries that you can do without. Going for the latest model when you need a car or going for a luxurious holiday when you cannot afford it can cause you financial problems and deal a fatal blow to your long-term goals.
Your children will also learn that smart management of finances requires you to make sound choices. They will learn that it is advisable to budget for needs first and if there is money left they can use it for their wants.
- Lifestyle inflation
Lifestyle inflation occurs whenever people spend more money when they start earning more money. This may see us living beyond our means just to please the Joneses who are also our colleagues and neighbors. This may teach your children that it is more important to save on materials things than make smart choices regarding their finances.
You can set a good example by using your increased salary to save and invest rather than spend it on more things.