No matter how many books on parenting we read, everyone makes mistakes when raising their children.

One of the most common, and one that can be a problem throughout life, is not teaching children about money and how to manage it.

Here are a few common money mistakes parents make and how not to pass them on to the children.

1. Be honest about the family’s financial situation

Be honest and tell them that “No, we cannot rent an entire theme park for your birthday party like Beyoncé did. Why? Well because that costs millions of dollars and mummy is not a millionaire.”

Telling your children what you can and cannot afford is difficult because you want them to know you would give them the world.

But not doing so might leave them with false material expectations that cannot be fulfilled and a lack of understanding why.

You can still make your little girl feel like a princess. Showering her with love and emotional assurance is far more valuable in the long run than splurging on a fleeting fancy.

2. Teach them about long-term saving

Most parents do not tell their children how much college tuition costs and that they started saving for it when they were born. But maybe you should.

Let your kids know that buying a house and paying for their education is not easy.

Start small, “That new gaming console is expensive, how many weeks do you have to save your allowance to pay for it?”

Knowing how to put aside a little money early on to pay for something will reduce the shock when, as young adults, they are responsible for their own finances.

3. Don’t buy things because its on sale

That spike in adrenaline when you see a 60% sale on that gorgeous designer bag? That crazy-eyed grin and sprint to the cashier?

Your child can sense your feelings too. And the message they absorb is that a sale is permission to spend to your heart’s desire. This is an unhealthy mindset, both for the parent and the child.

So, it is in your child’s future interests not to give in to the temptation of a sale. It is hard to break the habit, but it is better for yourself and your children in the long run to ignore the sign and keep walking.

4. Explain money tension

Children observe and absorb everything. They are far more adept at picking up nonverbal, emotional signals than parents think.

Children sense your stress over a desk piled with bills or arguments over spending, no matter how much parents try to hide it from them.

This teaches them that money is a source of anxiety and fear because it makes mummy and daddy fight.

These internalised perceptions may influence how they deal with their own finances when they are adults.

They may be reluctant to think of or discuss money management because they do not want to replicate the kind of tension they experienced as children when the bills arrived.

The best way to avoid this is to trust your child. Sit them down and explain what those papers mean.

Tell them that you make so much and that using the lights and water costs this much. Tell them every family has these costs and sometimes they cause problems, but people get through it.

Depending on how young the child is, they may not fully understand money concepts, but trying to explain it to them calmly will show them money is not such a scary thing after all.

5. Lead by good example

You think that children heed your warnings about things, but they heed your actions.

You spend hours explaining to your six-year-old how to budget, save and make conscientious decisions but throw it all away the moment you set eyes on a pair of Gucci suede ankle boots in the store window.

What this teaches your child is that budgets do not matter and it is okay to satisfy any and all wants instantly.

All children want is to be cool and grown up. Show them that being grown up means being making cautious and discerning choices and handling finances with confidence and care.

There are few lessons you will teach your children that will be as important in adulthood as thoughtful money management. Teach them its value and guide them towards using it for a purpose.

Next thing you know, they will be all grown up and paying bills on their own, and trying to make as few mistakes as they can as they raise their children.

This article first appeared in The New Savvy

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