Model Money Smart Habits

It has been said that "Children are great imitators. So give them something great to imitate."

As parents, we know our children observe our every action, including gaffes that we hope will go unnoticed.  We have those hopes because we know that our actions speak loudly.

In fact, a March 2010 Themint.org poll showed that parents have the biggest influence on the way kids save and spend money, moreso than friends, celebrities or their teachers.  Believe it or not, parents shape the way children manage money more than anyone or anything. They actively absorb the way that moms and dads pinch pennies or make mistakes with money.

Questions to Consider

Modeling money smarts takes a serious parental commitment.  Parents should consider the behaviors that they’re modeling to their kids by asking themselves: 

• Do my kids see me economize?
• Do they see me shop more often at outlet malls or high-class boutiques?
• Do I suggest that shopping is entertainment?
• Do I wait for an item to go on sale?
• Do I regularly clip and use coupons?
• Do I send in rebate offers?
• Have my children ever seen me save up for large purchases or do I whip out the plastic when you see something I want?
• When I make large purchases, do I research brands and features?
• Do I comparison shop with my kids to underscore the seriousness of the purchase?

Teach Them Well

Modeling money smart behavior doesn’t have to be complicated; there are many simple things parents can do.

• Involve kids in everyday conversations about money.  Use real-life situations to help them learn lessons.
• Use the grocery store as a classroom.  Talk through purchases with young shoppers and help them weigh all factors that go into a purchase decision.
• Extend the grocery store lesson to the shopping mall.  Reinforce smart spending, not immediate gratification. Wait for discounts, save for items and pay with cash instead of plastic.
• Emphasize planning.  Make a list before you enter a store to teach children to focus on needs.

Modeling money smart habits to children – aligning your actions with your words – brings the lesson home.  Start early, and you’ll lay the groundwork for financial security later on.