Educating your kids now produces smart money managers in the future.

Editor’s Note: In the last section of our Financial Illiteracy series, we discuss what parents should and shouldn’t do when teaching their kids about finances.

1. Don’t do this: Argue about money in front of your kids

Many married couples don’t bother discussing finances before their wedding. And when they start living together, it becomes apparent that they don’t share the same spending or saving habits.

Fast-forward: The kids are born and it becomes worse, because kids cost money. When the kids see you screaming and yelling at each other about money, they view money as the troublemaker. It’s causing these nasty arguments, so at a young age, they associate money with mom and dad freaking out on each other. That’s not healthy.

Do this instead: Voice your disagreements in a calm manner

Married couples usually fight about money. It’s just the way it is. But how you do it, especially in front of the kids, is key. Instead of screaming and cursing, quietly discuss the issues. Maybe one spouse spends too much or the other doesn’t pay the bills on time. Sit down and compromise instead of blaming each other.

Working out these challenges in a reasonable manner is essential. If you don’t they’ll continually disrupt the marriage and negatively impact the kids.


2. Don’t do this: Refuse to talk about money with your kids

Many experts believe that one of the reasons why adults are so foolish with finances is because their parents never taught them any better. Don’t make the same mistake.

Kids learn by listening and doing things, just like brushing teeth. Money matters are no different. If you don’t discuss the value of saving money, paying bills on time, or using credit properly then there’s a good chance they’ll become rotten money managers.

Do this instead: Have the money talk with them

Talking about money certainly isn’t as difficult as the birds and bees discussion. It’s simple: pay the bills with them, let them open a savings account and watch their money grow, have them pay the bill for lunch and collect the change, and warn them about credit card abuse.

Set up an allowance with them and if they start spending frivolously, help them understand the difference between needs and wants. They may want five chocolate bars but they need a new notebook for school. This is your chance to pass on life-changing lessons. Don’t mess it up.

3. Don’t do this: Try to keep up with the Joneses

This bad habit screws up your finances and imparts the wrong message — a message of envy and materialism.’s chairman Howard Dvorkin includes a whole section on this reckless behavior in his book Power Up. He says, “If you happen to associate with people who make more money and you want to keep up with them, then you may become desperate and start using your credit cards for things that you simply cannot afford.”

It’s true. People get jealous over materialistic things.  They go about spending recklessly because they’re insecure and want to be part of the “in” crowd. If that’s how you act, your kids will witness the behavior and could repeat it in the future.

Do this instead: Show some financial restraint

Not everyone drives an expensive car or owns an expensive home. For all you know those people driving new BMWs could be drowning in credit card debt. That’s not your problem. Teach your kids to be happy with what they have, regardless if it’s a 2005 Hyundai or a 2015 Corvette.

Remember, you may initially feel thrilled about making a big purchase, but eventually that feeling fades once you realize you increased your debt. This sends your kids the wrong message. Teach your kids the power of restraint and the importance of not buying into the materialistic frenzy of want, want, want.

4. Don’t do this: Give your kids everything they want

People are fond of saying, “I want my kids to have more than I had when I was growing up.” That’s a nice sentiment but sometimes it’s unrealistic and financially dangerous.

If your kids get everything they want because you didn’t have it, or because you think they deserve it for some strange reason, guess what — you’re setting them up for a fall. This just gives them a sense of entitlement.

They’ll live with the notion that they deserve everything, regardless of the cost or financial damage. And if they get into an adult relationship with that attitude, you can be sure they’ll need to heed the advice in No. 1.

Do this instead: Just say no

It’s not hard, and it’s even liberating for some parents, especially when they feel controlled by their kids. If they’re young and prone to meltdowns, let them scream like banshees and thrash around on the floor. Don’t give in. They’ll soon understand limits. If you do constantly give in, there’s a good chance you’ll have an entitled teenage brat in the house one day, expecting top-of-the-line clothes, phone and car. Good luck with that.

 5. Don’t do this: Say no to credit card use

“But they’re only kids, why the heck would they need to use a credit card?” That’s what most parents say when the kids and credit-card-use conversation comes up.

Kids must learn about credit. You wouldn’t let your kid drive a car without taking lessons first. That’s dangerous. Using a credit card without any knowledge of the financial implications is also dangerous.

Do this instead: Let them use your credit card  

There are no special credit cards for kids, but they can become authorized users under your account. The question is, when do you let your kid use your credit card? That’s up to you, but starting them off at a young age is financially smart.

You don’t let them run wild with the card. Give them permission to charge something they need with the understanding they they’re responsible for paying off the debt at the end of the month. It teaches responsibility and also gives them the knowledge that using a card is not magic — they don’t simply swipe the card and the bill is paid.

When they’re adults that knowledge will hopefully stick with them.  So before they make an irrational  purchase at a sales event, they’ll think twice and remember the bill at the end of the month. That knowledge prevents debt.

We hope you enjoyed our Financial Illiteracy Month series. Put these valuable lesson to work for you, and visit on a daily basis for more financial news and knowledge.

Meet the Author

Brian Bienkowski

Brian Bienkowski


Bienkowski is a contributing writer and is the face of's 'By the Numbers' videos.

Budgeting & Saving, Credit & Debt, Family

credit card debt, credit cards, parents

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Article last modified on September 12, 2018 Published by, LLC . Mobile users may also access the AMP Version: Financial Illiteracy Month Part V: 5 Ways to Make Your Kids Financial Failures - AMP.