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7 Bad Financial Habits to Get Rid Before Starting a Family

As a parent, you are your future childق€™s very first role model. Kids know that their parents will take care of them and teach them all of the skills that are needed to become a successful person. However, if you are slacking in the financial department and are indulging in bad money habits, then you cannot expect to teach your kids to be financially successful. Here are seven bad financial habits that you should kick before having children.

1. آ Carrying Credit Card Debt

About 8 percent of people in the US only pay off the minimum balance on their credit cards . Having credit card debt can negatively impact your credit and cause you to have to pay even more down the road once you have interest accumulating on it each month. If you have more than one line of credit open for making purchases, and you continually avoid paying off the final balance, then your kids think that using several credit cards to make purchases is a regular financial habit.

2. آ Not Keeping Track of Your Spending

Over one-third of US citizens spends more money than they make every month. Often, much of this excessive spending is on entertainment like going out to the movies and dining out. If you do not keep track of where your money is going then, there is no way to budget it properly, which means that you cannot meet any of your spending or savings goals. Pay attention to cash flow so that you can teach your children to be mindful of their purchases and less likely to shell out dollars for unneeded items. An excellent way to track your spending is to use Mint.com to track your daily expenditures.

3. آ Not Budgeting Your Money

One of the worst financial habits that people have is not budgeting their money. Budgeting aids you in organizing your funds and spending the right amount of money per expense. To develop a budget, you must first figure out how much income you bring in every month. After that layout your fixed payments like car or mortgage payments and rent. After that, figure out how much you spend on essentials like groceries, which have prices that fluctuate each month. If you find areas that you can cut back in, then start setting goals to do so. Once you develop budgeting habits, you can teach your kids to properly budget by giving them an allowance each week in exchange for chores.

4. آ Not Having an Emergency Fund

If you became unemployed tomorrow how long could you survive on your savings? You must build an emergency fund for situations like these. You should save enough money to have coverage for between three and six months of your living expenses. This is less than your actual three to six months of income as it does not include retirement contributions, unnecessary spending, and taxes. Teach your kids about saving too so that they can start to build a nest egg for themselves early in their financial career.

5. آ Not Working Together as a Family on Financial Issues

Even in this modern day and age, women are often not as involved in their familyق€™s finances. They may do all of the day-to-day budgeting, but are less likely to help with the big-picture finances such as investments, debt payments, and taxes. The issue with that is that if one family member tends to be more aggressive with how they handle money or does not take care of it in a way that the other would, then this could cause major rifts. Check in regularly with your financial planning, even if it is your spouse that does most of it. This will help teach your kids that they should have a part in their own financial planning no matter the situation.

6. آ Splurging On Payday

Teaching your kids that payday signifies the time to splurge is a big no-no. Donق€™t spend your paycheck without careful planning and putting money away into savings so that you will always have money on hand when you need it. When you are flux with cash, it can be easy to want to go out and celebrate by spending money, but resisting this urge is the best way to teach your kids that payday is not another word for “spend day”. To break this bad financial habit, you must first break the cycle of not budgeting and overspending in the first place so that there is no reason for you to spend big when you get your paycheck.

7. آ Loaning Money Out

Although it is nice to help your friends and family out every once in a while, it is best not to overextend yourself just because your brother, friend, or sister needs the cash. Generosity is always an important thing you want to teach your children which can be done in many other ways besides lending out money. Some other ways to be generous can be taught by volunteering or helping grandma out with chores. Above all, make sure that you take care of yourself and your bills first before even considering aiding others financially.