The Personal Finance Lessons Kids Learn When You’re Not Looking

Kids are imitation machines and will learn your personal finance habits by example. What are you teaching them?

I’m always amazed at what our son will say and do after watching us. For better or worse, kids learn from their parents and that goes for personal finance habits.

It’s a hard lesson for some but it’s never too late to start teaching your kids good money habits by example.

Today’s essay is by Kassidy Ferguson, a student at Estrella Mountain Community College. She shares some of the lessons her parents taught her about money, some on purpose and some by example.

Check out Kassidy’s story and please share on social media. The most-shared essay on how parents can teach their kids about money will win one of our two $500 personal finance scholarships, announced August 31st!

Not sure how to start the money conversation with your family? Check out this guide to talking about budgeting and saving with your loved ones.

How Kids Become their Parents’ Money Habits

Money. We all recognize the value of having it and the struggle of not having it, but when you think about it, how do you handle your finances?

More importantly, how did you learn to handle your finances? I think we can all agree that our parents taught us a huge amount growing up and even things they didn’t “teach” us, we learned from watching them. So, how can we take what we’ve learned and put it to use to our advantage?

Well, I’d start with what we were meant to learn.

My parents started me along my financial journey when I was about five or so. Every time I lost a tooth, the next morning I would wake up eager to search under my pillow for that coveted one dollar bill. On St. Patrick’s day, my sister and I would open our tired eyes to a trail of pennies that led us out of the room, down the hall and into another room where we would find our small bounties of “gold”.

Now, as soon as we had collected our then novel amount of change or money, our parents would ask us what we wanted to do with it. More often than not, I would end up shoving the crumpled dollar bill and slipping each cent one at a time into the quarter sized opening of my little blue pig to save for later.

Usually, when our little pigs were stuffed so full they couldn’t ingest another penny, we would dump out all our change and my parents would take us to the mall or to the little coffee shop down the street to spend our money how we liked.

This would become the first lesson on finance from my parents, you need to have money to spend money. Later, we each got our own savings accounts at the bank, and when we were old enough, our parents let us get debit cards, the ones that you pre-put money on and physically can’t spend more.

Honestly, I still use that method, you can’t spend money you don’t have.

Getting your first credit card? Learn how to master credit as a student.

Learning Personal Finance by Example

I’m sure that as many people know, you’re always learning from your parents, even if they don’t sit you down to teach you a lesson. For me, one of the biggest lessons I learned about finance from my parents, was one they didn’t know they were teaching.

My father makes quite a bit of money working as an engineer, and my mother is a teacher who makes about half of what he does, either way though, each year is easily six figures. Something I could never understand growing up and even now, is how they actually have very little extra money. To me, they were never struggling, just never getting ahead.

This taught me two lessons, one, how to use credit cards efficiently, and two, how to budget efficiently.

I didn’t find out until very recently that the main reason my parents didn’t have extra money to save or throw around was because they had credit card debt. This wasn’t just a thousand dollars on one card, but a stifling pit of debt that took up half of the monthly pay check.

After stumbling upon this dirty little secret, I made a promise to myself that if I ever got a credit card, I would only use it if I knew I had the funds to fully pay off the item. This might sound a little harsh, but I didn’t want to make the same financial mistake that so many people seem to make.

As for my second lesson, seeing how my parents didn’t really do much budgeting at all, I learned how important it is in order to achieve your financial goals. When you set aside money to go to specific things, you can keep track of everything, see what areas you are spending too much in, cut back, and save a little more.

My parents are amazing, and I love them for all the lessons they’ve taught me, on purpose or not. So, the next time you are thinking about your finances, look back on what your parents showed you. Learn from their lessons and their mistakes and you’ll be pretty well off.

I want to thank Kassidy for her story about the financial lessons her parents taught her. Be sure to support Kassidy by sharing the article through social media and check in August for the winner of the personal finance scholarship.

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