How do Parents’ Financial Decisions Affect Child Behaviour?

You may not really realise it when you’re a parent to your little one(s), but whatever you say or do – everything literally tends to impact them – positively or negatively, in small ways or big.

This holds true for all things that matter to you at that stage of parenthood; of particular concern is finances. When the responsibility of parenting falls over your shoulders, you start thinking about money matters more than ever.

And little do we realise then how our financial decisions at the time affect the way our children think about or deal with money as they grow older. This is why we attempt here to explain the long-lasting effect of our financial decisions on our kids’ financial attitude later in life.

How Parents’ Financial Decisions Shape Child Behaviour

Before we begin this analysis, it’s important to note here that as parents, we of course make decisions which deem “appropriate” at the time in light of our children’s future. However, we all are humans and we can’t be “right” all the time.

1. You stay on a very tight budget, always:

The result: you unconsciously end up refusing your child each time they approach you with a demand – small or big – toys, clothes, school trips, etc.

As they grow older, they start getting the impression that they’d be denied of whatever they ask for, and therefore they stop demanding. This can prove unfavourable to their own interests at times, especially in terms of career choices. They may hesitate or not even ask for financial support while choosing a professional course, which may leave a huge impact on their career prospect.

Always let your child know the reason when you deny any of their demands. They need to know why something they’re asking can’t be approved of at the time. Follow a cause-and-effectrule with them from a very early age. Most important, refrain from accepting all demands but never let them feel deprived.

2. You tend to overspend because you don’t want to sadden your child:

This is again a potentially harmful condition. Now overspending as a parent could also sometimes be a fallout of you not having gotten all you asked for in your childhood and this is why you don’t want your children to be “deprived” of anything at all.

Unknowingly, you tend to make your child feel at luxury all the time. They get the impression that everything they want and ask for comes super easy to them, almost like on a silver platter. When they grow older, they may not always experience financial stability and comfort at all times and this is when adjusting to newer challenges might get difficult. Besides, they may never learn to “earn” things through hard work.

Teach your child to earn what they feel they’re due or worth getting. It may be as small an item as an expensive pen in the market but tell them that nothing comes easy.

3. You give out in charity way too much:

You may be doing the right thing, no doubt, and also passing on the right message to the next generation. What you need to remember though is to refrain from the practice if it gets unaffordable. Don’t do it out of obligation and teach the same to your kids too. They need to understand the true spirit behind it.

Conclusion

It’s like walking a tight rope and the key is to maintain a fine line of balance between restricting and overspending. Remember what you do today would reflect years later and can either make their future or sadly even spoil it.