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Parents' Top 10 Money Mistakes
The Most Common Financial Errors and How to Avoid Them
By Beth Skarupa
We've all made money mistakes. Maybe we've financed a car we really couldn't afford or spent our money before we even earned it. As parents, our money mistakes are a bigger issue because our children depend on us to make the right choices. Recognizing the most common money mistakes can help us avoid them.
If you're not aware of what you're doing with your money – where it's all going and why – then you're not likely to manage it well.
Hannah*, a single mother in Singapore, learned that not planning for your money realistically can result in some difficult situations. Working as a freelance writer, she would count on money to come in at a certain time – and when it didn't, she was left in a tight spot. "Because I've been expecting the money, I've spent as though I've already received it," Hannah says. "That has made for some hairy situations when I have just about not been able to put food on the table – literally."
"Not doing money on purpose" is the biggest mistake people make, according to Dave Ramsey, financial talk show host and author of The Total Money Makeover: A Proven Plan for Financial Fitness (Thomas Nelson, 2003). "When people start bothering to not care who got thrown off the island, and instead have a game plan and an overall intentionality on the issue of money, they make pretty good decisions," he says.
"A budget has a bad reputation that's unfounded," Ramsey says. "John Maxwell says 'a budget is people telling their money what to do instead of wondering where it went' and that's all it is. It doesn't have to be a form of medieval torture; it's not one spouse trying to control the other spouse; it's none of those things. It's just a paper game plan – and it's not this generic month from heaven, it's this month."