These Are the Bad Money Habits You’re Teaching Your Children

Little boy holds a one-dollar currency note.

As parents, it’s important to instruct your kids in personal finance from an early age. Whether it’s how to make a budget, how to start saving or how to live within one’s means, these are all important life lessons that can lead to long-term financial stability and success.

But it’s not always easy to know which money habits are good to pass down, and which aren’t. If you yourself don’t have a good financial foundation or know how to broach the subject of personal finance, it can be even harder to teach good financial habits.

Even if it’s tough, it’s still necessary to lay the foundation for the next generation. Here are the main bad money habits you could be teaching your kids, and what to do instead.

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Parents Worry They’re Not Teaching Their Kids These Money Habits

So, which bad money habits are you passing down to your children? GOBankingRates conducted a survey recently of just over 1,000 American adults to find out.

• Not prioritizing savings: 23%
• Impulse shopping: 22%
• Not creating a budget: 20%
• Not building an emergency fund: 20%
• Living beyond your means: 20%
• Using credit cards too often to buy things: $20%
• Not investing: 16%
• Not paying bills on time: 13%
• Paying only the minimum balance due instead of the full amount: 12%
• Caving to lifestyle inflation: 8%

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Experts Weigh In: Passing Down Good Money Habits Instead

Even if you’re working on breaking some bad money habits for yourself, there are still ways to pass down good habits to your kids. Here’s some expert insight to help you out.

Encourage Open Communication

“Financial literacy is often so absent in our education, which frequently leads to fear about discussing money-related matters and even shame about their lack of knowledge,” said David Maurice Sharp, financial literacy educator and published author. “While it is probably prudent to keep issues like net worth private, a lot can be gained from discussing other money-related matters with friends and colleagues.”

Sharp suggested teaching your kids about less personal things like which accounts pay the best interest rates or what types of mutual funds might be worth investing in. Teaching your kids that it’s OK to talk about certain money-related topics could also ease any discomfort you might feel around your finances.

Focus On Saving and Investing

If you’re struggling to teach your kids to save or invest, remember that it’s OK to start slowly. Even if you encourage them to start with a small amount of money, it can help them build good habits that’ll get them further in life.

“These days, there are so many solid investment vehicles that you can obtain with just small amounts of money — even as low as $1 at a time! By failing to teach kids to regularly save and invest, even with amounts that are small, it prevents them from developing the good habit of paying themselves. It also precludes them from benefitting from years of compounding,” said Sharp.

He suggested talking with your kids about finances and trying to pique their interest in the world of investing. Try to be as proactive and encouraging as you can.

“Maybe open a custodial account to invest small amounts in some stocks and mutual funds and engage them in the process,” Sharp said. “Do they have any ideas about assets they might like to own in their account? Encourage them to discuss the pros and cons of the possibilities they come up with. And teach them how they can discuss their financial explorations with their friends without disclosing any information that is best kept private.”

Start Planning Ahead — and Be Active

As you go about teaching your kids about personal finance, remember that you’re helping both them and yourself out in the long run. After all, the more you prepare your kids, the less likely they are to lean on you for financial support when you’re trying to plan out your own retirement or other long-term goals.

“Having candid and age-appropriate conversations about the family’s household expenses [and] about saving in advance in an emergency, college or retirement fund can be extremely beneficial to a child and can actually bring them comfort,” said Patricia Roberts, a personal finance educator and book author. “Such conversations — and beyond that, the visible actions that support these conversations — can help a child to develop financial skills that can serve them well in their adult years.”

Give Your Kids an Allowance and Show Them How To Use It

One of the best ways to teach your kids about personal finances and the value of money is to give them the opportunity to actually use it.

“Parents can instill habits of saving and budgeting money by giving children a small allowance and guiding them on spending it prudently,” said Jonathan Feniak, a former financial advisor and general counsel at LLC Attorney.

Encourage Budgeting Early On

This is something you can do by giving your kids an allowance, but you can also accomplish it by getting them involved with the family budget when they’re old enough to understand but young enough to soak it in.

If you don’t have a budget, now’s the time to make one. It’ll help you out and your kids once the time comes for them to manage their own money.

“If you don’t have a budget set for your finances each month, you’re likely wasting a significant amount of money each month,” said Ann Martin, director of operations at CreditDonkey. “You need to keep track of your spending in order to identify areas where you could potentially be saving money. Setting a budget and sticking to it will allow you to be in control of your finances, rather than hoping and praying you cover all your bills each month.”

This, in turn, can help prevent issues like living beyond your means, relying on credit cards or purchasing things impulsively. It can also free up some extra cash for saving, investing or building an emergency fund.

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This article originally appeared on GOBankingRates.com: These Are the Bad Money Habits You’re Teaching Your Children