3 Bad Money Habits You'll Want to Stop Teaching Your Kids
In a past post, I spoke about how the one thing that unites all parents is stress.
We don’t all make the same choices about how we raise our kids. But we all experience stress.
And I bet I can narrow it down even more: most parents feel stressed about money!
If you want to live a life with less stress, I feel like the easiest way to do it to take control of your finances. Remove money as an avenue away from stress. Prevent it.
If you want less stress and to set your kids up for success with money from the start, QUIT teaching your kids these three money mistakes.
1. Bad Budget Mindset
I teach my kids that budgets are like a fence.
It’s a place that can keep you safe but still let you play. You just have to accept your limits.
They are not limiting. They must be supple and flexible in order to be realistic.
And when making a budget, you need to do your research and plan ahead for unexpected emergencies.
2. No emergency account
I constantly worry about my AC going out. It would be really challenging to replace it, and my home would be unbearable!
And I am doing it to myself. Building an emergency account worth at least the cost of a new AC would completely relieve me that stress.
Keeping an emergency savings account is different than a savings account.
Emergency accounts are for smallish emergencies so you never have to worry about coming up with quick money again, like car repairs or replacing an appliance. A regular savings account is for long term savings for retirement or buying a home, etc.
We need to teach our kids that emergencies happen, but they don’t have to affect our mental health if we plan for it!
3. Only active income
Did you know there are two types of income?
Active income is any money made through employment or in exchange for a good or service.
Passive income is any money made through minimal effort. A popular example is investing. But there are tons of ways to make passive income.
I explain it to my kids like this: Active income stops coming when you stop working. Passive income comes even when you don’t work.
Teach your kids to build passive income streams. This is how true wealth is built.
Do you have anything to add to this list? Let me know on Twitter @addictivemess!