Parents can be great role models for their kids, teaching money habits and financial responsibility
We’ve seen how parents can teach their kids about money in many of these scholarship essays but parents can also teach their kids good money habits just by being good role models. I’m always amazed how quick our four-year old is to imitate the things my wife and I do. Someday, I hope he’ll imitate the financial habits we’ve shown him.
Today’s essay is by Diane Meraz, a student at Colorado State University in Watershed Science. Her story is an important one showing that parents not only have to teach their kids about money but need to teach them good money habits from their own actions.
Check out Diane’s story and please share on social media. The most-shared essay on how parents can teach their kids about money will win our $500 personal finance scholarship, announced August 31st!
Looking for more ideas on teaching you kids about money? Check out this huge roundup post of 36 expert ideas on teaching kids money saving tips.
My Money Habit Role Models
Growing up in a low income family, money was very limited in my household, and knowing how to manage expenses was something my parents taught me at young age. My parents made it well aware that we didn’t have much money to spend, but how they invested and budgeted their money is what made a difference in our lives.
Many times I saw my parents writing down all their expenses and making budgets for themselves, which made them aware of how much money they were able to spend. They would set aside a certain amount of money from each paycheck and transfer it into a savings account, which allowed them to have some wiggle room with their expenses. I took notice with how cautious my parents were with their expenses so that I too could be smart with my personal finances.
Good Money Habits Pay Off Later in Life
When I first became employed at the age sixteen I found myself developing the same money habit of writing down all my expenses and making budgets for myself like my parents did. It felt great being able to manage my money in a responsible manner and still have money left over to save and spend.
For the most part, I was financially independent from my parents because I covered majority of my expenses and never asked my parents for money. During my senior year of high school, I was able to save over five thousand dollars to pay for my Europe trip. I valued every second I spent in Europe and realized that anything is possible if I manage my expenses responsibly.
Ever since then, I have become very disciplined with my expenses and won’t buy anything that I don’t necessarily need.
At the age of eighteen, I opened up a credit card without my parents help and today I own five credit cards at the age nineteen. I know how important it is to have good credit so I am very careful with how I use my credit cards and when I choose to use them. I only know one thing is certain in life, and that is you need to have good credit if you want to own a nice home someday.
Good credit is something many people take for granted…until they’ve destroyed theirs and can’t get a loan on a pack of gum. Check out this list of 21 steps to boost your credit score and use debt as a financial tool.
Money Habits Bring Financial Independence
Being financially independent from my parents has made me well aware of where my money goes and how much money I can afford to spend. I have taken out loans under my name to pay for college and I pay for my own rent and expenses as well. I only mention this because I personally know many students who have to depend on their parents to manage their finances and personal expenses.
I feel extreme gratitude towards my parents for teaching me how to be independent and responsible with my finances. I like knowing that I have good credit, can afford to pay for bills, and not have to go through my parents to take care of my finances. I know that the only way to really make money is by saving money, which is something important I learned from my parents.
Most importantly, I value my education and personal belongings because I pay for all that myself. School is expensive itself and it is stressful being a full time student while having to pay for bills. However, balancing school and bills is manageable. The only reason why I can handle so much pressure and stress is because of my parents. I feel confident that my financial journey is secure because I have amazing parents that taught me great financial habits.
Learning financial responsibility can happen at any time in our lives. Read about the money lessons I learned in the Marine Corps.
I want to thank Diane for her essay on how her parents taught her good money habits from their example. Debt and poverty can be a generational problem unless you resolve to teach your kids financial responsibility through your actions and lessons. Be sure to support Diane by sharing the article through social media and check in August for the winner of the personal finance scholarship.
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.