5 “Really” Bad Financial Mistakes Parents Make

March 23rd, 2011

Parents.

I know you have a heart for your children.

You love them so much, you cannot stand the thought of them going through any pain.

I have 2 girls and want to wrap my arms around them 24/7.
It hurts when they hurt.

But here is the deal…

If we are constantly sheltering/spoiling them, we are essentially crippling them.

If we refuse to let them to go through the fire, then they will never grow.

The Bible says TRAIN up a child in the way he should go and when he is old he will not depart it.
It does not say give them everything they want and/or shelter the child….it clearly says TRAIN.
Training takes time, it takes your patience, it takes you teaching your child step by step.

Just look around. How many babies do we have running around in adult bodies?
One of the traps is paying for stuff and not letting our kids earn their way to the purchase.

From my coaching experience, here are 5 areas where I consistently see parents
miss the mark when it comes to “helping” their kids. In actuality they are hurting their children:

Buying them a car. Do you think driving around in a brand new car that daddy bought really builds character? Having and buying a used car (yes, even a clunker) helps build character and humility. Plus, you miss out on all the great stories. One time I was driving down the road and the hood on my used Toyota Celica decided to come unhinged….slamming into my
windshield. I can laugh about it now. I will never forget the expression on the drivers face in the next lane. It was a cross between of complete shock and confusion.
Purchasing a home for the child (adult children count here too!). From my mortgage background, let me shout from the mountain top on this one: STOP! I have seen so many families ripped apart when
junior decides to stop paying. Make them EARN the right of owning a home. I know, what a novel idea.
Giving them “Allowance”. Besides government workers, it seems like the rest of us are not allowed
anything. We have to WORK for it. Paying commission on a job well done around the house goes a lot further.

Paying the kiddos debt. Another mountain shout: STOP! They need to go through the fire. I have seen so many times that parents pay off the debt only to see the adult children go right back into debt. Let me be crystal clear here. If someone is intense, has been paying off their debt with pit bull intensity and they have a track record of doing this, I see no problem if parents want to “gift” some of the money to expedite the process. There is track record. My problem is when parents are throwing money at junior and junior hasn’t changed his/her behavior. You might as well light your dollar bills on fire and burn them…….it’s the same thing.

Paying for their College. Parents…you are not going to hell if you do not fork over 30k a year so junior can HOPEFULLY find himself/herself in the next 4 years. There are a ton of classes they can take online to save money, community college (especially, the first 2 years ….which essentially is 11th & 12th grade all over again), or they might have to take their time and be PATIENT as they WORK their way through school. My wife, Sharon, has always said that not enough kids today “job shadow” before they decide what they want to do. Instead, most of us act like a herd of cattle and shuffle our way to the next step in life without thinking (yours truly) and hope that we “come up with something” at the end of 4 years (usually longer more like 5-7 years). Here is another concept to think about: Maybe college is not for everyone? I know you just blacked out, but some of the most successful people in this country never went to college. I know, shocking.

What do you think?

Maryellen

As always some great tips here. Thanks for giving me the chuckle recalling my first car- a gently used Dodge “Bombni.”
http://buildingconfidentleaders.com/ Jeff Brunson

Boy Gregg, I sure hope you get some good readership here. This would be so helpful to so many … and very encouraging. I remember when we went to pick up our new lease car. I had them also find a used car to meet my requirements for our then 17 year-old daughter. She thought she was just riding along with mom and dad to get the new family car. She was so excited. She made me proud. She had no problem with us picking out her a car without consulting her and that it was a used one. She was simply proud to have her own – for which she had to work for gas and insurance. She turned out to be a fine adult in spite of us not giving her everything. She is a very giving adult to her friends and family.
Anonymous

Thanks Mary Ellen….I guess we all have comical stories of our first cars….
Anonymous

Thanks Mary Ellen….I guess we all have comical stories of our first cars….
Anonymous

Thanks Mary Ellen….I guess we all have comical stories of our first cars….
Anonymous

That gives me hope Jeff….love hearing stories of people of being grateful for what they have. So rare these days
http://www.exconsumer.com Jenny @ exconsumer

These are great tips Gregg. I know of parents in my area that have started a “car savings” for their four and five year old children. This just seems like a bad idea to me on so many levels. I’m not sure what kind of entitlement message it will send to a sixteen year old if they get a brand new car for simply having a birthday.

I do give an allowance to my six year old ($6 per week), but he has chores he’s expected to complete in order to earn it (cleaning his room, keeping his toys picked up, flushing the toilet, etc.). If he fails to complete one of his chores, I deduct $2 from his allowance. He’s allowed to spend half of his allowance, and he has to save half. So, when he loses allowance for not completing chores, it comes out of his “spending” portion.
Anonymous

Great job Jenny training up your 6 year old.
We have changed the word allowance to commission for my 8 year old. Either way, she has to complete the chores to earn it. and she knows that if she doesn’t, their will be a deduction.
Thanks for the feedback and sharing…..
Andrew

Nice article Gregg. I would like for you to add one more, not making kids wait for and long for a special toy or game. That builds character when they have to wait for it. Make them work for it for a few weeks. Or, heaven forbid, just not get what they want.

Andrew Darlington
Anonymous

That is cruel and insensitive punishment Andrew! (insert sarcasm)
Agree. The longer they wait , the sweeter it will be…….
http://twitter.com/brentmkelly Brent Kelly

Great tips Gregg. With three little ones I hope to not make any of thise mistakes.
Anonymous

Thanks Brent for the kind words. I know what you mean, I have 2 little ones….
http://roncents.wordpress.com/ Ron

Spot on Gregg!
Anonymous

Thanks Ron….glad to help
http://www.fightingbackfinancially.com/016-money-saving-mom-crystal-paine 016- Money Saving Mom: Crystal Paine

[...] the first part of the show, I review the “5 REALLY Bad Financial Mistakes Parents Make” with their kids. Please avoid these at all costs! Your kids will thank you later,… trust [...]

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