Creating Good Family Financial Habits – Money Pacers
Creating Good Family Financial Habits

Creating Good Family Financial Habits

(Family) It can take years of experience to develop good financial habits, but the benefits of being responsible with your spending are well worth any effort it takes to develop good practices. When you have your finances under control, you can keep you and your family out of debt, you can maintain a strong credit score, and you can get the financing you need to make big purchases.

That’s a problem, experts say — especially in families. We develop our attitudes and beliefs about money in childhood. If you’re not talking often enough about money, and modeling good money management habits, your children won’t be set up with good financial habits for future success. Here’s what to do.

Open dialogue

With a little planning, you can talk to your kids about money in healthy, helpful ways.
Include the entire family in financial discussions. You may want to avoid the word “budget,” since it makes people think about cutting back. Instead, sit down together to develop a family spending plan. By focusing on what expenses are important to your family, you will naturally find ways to cut back on items you care less about.

Keep your goals up front

Consider making a collage or bulletin board to represent your family’s financial goals. A daily reminder of the vacation you’re saving for or the house you’d like to buy helps both kids and adults keep big-picture goals from getting lost in the day-to-day shuffle.

Save together, spend together

When you decide to save for something as a family — such as a new computer or a trip to a theme park — show kids what saving money actually looks like. Get a big jar, and each week add dollars to the jar so the kids can see the savings grow. When you have enough saved, comparison shop together to help the children learn how to find the best value for their dollar.

Choose your words wisely

Parents often find themselves, saying, “We can’t afford it.” But that can send a confusing message to kids. Some might worry that their family doesn’t have enough money for necessities. But often, they know you’re not being completely honest — technically, you probably could afford that $10 trinket tempting them from the checkout aisle.

Instead, try saying, “That’s not how we choose to spend our money.” This helps kids think about what they value. You might also say, “We can’t buy it now, but we can talk about how you can save for it, or you can put it on your birthday wish list.” That helps children learn to delay gratification and plan their spending — two important pieces of financial health.

Use allowance as a tool

Experts recommend giving children an allowance as a way for them to become financially literate. But don’t tie the allowance to chores. That can backfire when kids expect to get paid for everything they do to contribute to the family.
Many financial experts recommend getting (or making) a piggy bank that’s divided into sections. Each time the child receives an allowance, he or she should put a predetermined portion into each section:

Spending — Kids can spend freely from this section. But when it’s gone, it’s gone!

Saving — Children can set a spending goal and save up to meet that goal.

Donating — By setting aside some money to donate, children learn the value of charity.

Investing — Help kids learn to save for the future. Once you have enough money saved up in this section, you can help your child open an investment account.

When your child becomes a teen, consider giving allowance on a prepaid credit card. This way, children can learn to track how much they’ve spent and how much they have left to parse out. When they go on to use their own debit and credit cards, they’ll already understand how to track and manage electronic money.

Seek professional help

If you’d like help managing financial stress and your family’s financial habits, consider talking to an expert.  Some certified financial planners provide financial education, and some also work with financial therapists. Many psychologists — including family therapists — have experience helping clients with money matters. Visit the APA’s Psychologist Locator Service to find a psychologist in your area. To find the right fit, ask a psychologist if they have experience with financial issues. Check out Your Kids Will Inherit Your Financial Habits at the

Don Briscoe
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Don Briscoe

Finance educator, advisor, and leading voice in the global financial literacy movement.Founder and editor of lives and enjoys life with his family in New York.
Don Briscoe
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