Financial Mistakes Teach Kids Money Management

emergency fund

Financial mistakes. Everyone makes them. Lending out too much money, overdrawn accounts, ignoring parking tickets, paying late fees on anything… these could add up to big losses over time. The biggest loser could be your financial future – yours and your kids.

It’s how fast and how well a person recovers that counts. Like a good ball game, finances are about strategy. Financial strategy is what we hope the kids can learn from money mistakes.

Lending Money to Friends

“Do I look like the bank?” is what many people when say when family and friends ask for money… Just before they fork it over. Of course helping out is something that we all like to do for loved ones. If helping is hurting you too much, it’s time to stop the bleeding! The bank is selective about lending. The bank also charges interest rates and charges late fees. You can too.

Valerie Coleman Morris, financial guru and author of “It’s Your Money So Take It Personally®” has a system for making these loans. She says that before lending money, the borrower has to explain why the loan is needed and outline the plan and timing for when she will get the money back. She explains that she does this to help people understand that she values her money and so that others will too.

This approach helps kids learn how to value money, and the value of having a plan for money.

Overdrawn Accounts

Hopefully the overdraft is just a financial safety net, a rare occurrence. But if dipping into overdraft with hefty fees and late charges becomes a ‘normal’ way of life, it’s time to rethink the budget and lower expenses. That extra $30-$40 on a $20 overdraft really adds up over time! These “micro loans” are financial vampires!

It’s time to cut the expenses – cut down on cabs, eating out and make the manicure last a little longer (switch to a neutral color so its less obvious when you’re between appointments). Do whatever it takes to trim the budget and get back on your feet.

Just pay it back – the overdrawn amount, the penalty and the interest. But mostly pay attention to your money and buy only what you can afford. If you can’t afford it in cash, then you can’t afford it on overdraft! That’s it, problem solved.  

Unpaid parking tickets

Parking tickets are so annoying! Most people have the same reaction – grab them off the windshield and shove into the bottom of the purse or briefcase.  Within a few days, the ticket is wrinkled beyond recognition and is already forgotten, since its not a normal bill.

Fast forward six months, and the ticket, penalty and late fee have doubled the fine!  Holding on to the tickets doesn’t make them go away. It makes the penalty higher.

Unpaid fines can lead to hard time – for you and your car. The time passes quickly and the fees compound, possibly to the point where the car is impounded and extra fees and fines are added to the original ticket before you can get your car back.

That’s a hard time for anyone who is used to driving.  Better to pay attention to parking rules and follow them.  Tickets that are paid are the easiest ones to forget.

What the kids learn from paying bills on time is a great money management tool – how to prioritize the bills.

What the kids learn

What the kids learn about money begins with you. The parents and caregivers are the biggest and best financial role models. Good money management today can lead to a better tomorrow for everyone.

You’re invited to preview a free chapter of my next book “LEMONADE SOLD OUT”. It’s based on a true story about an elementary school entrepreneur who makes friends, wise business decisions and a trip to the principal’s office.

Candi Sparks is the author of children’s books about money Can I Have Some Money?, Educating Children About Money, Max Gets It! and Nacho Money. She is the Brooklyn mother of two and is on Facebook (Candi Sparks, author) and Twitter (Candi Sparks, author). Her website is

About candi sparks

Candi Sparks is a fully licensed financial professional and a Brooklyn mother of two. She works with private clients, business owners, the NYC Department of Education, faith based, non profit and community organizations on financial education and implementing financial strategies for success. Events are fun, interactive and solid financial information. Sparks Fly, financial literacy for YOU(th) Learn more so you can live more! toll free: 866.556.2432
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4 Responses to Financial Mistakes Teach Kids Money Management

  1. says:

    Good morning
    You are so right . I made that mistake years ago I wish that I had this information. Thanks
    Sent via BlackBerry from T-Mobile

  2. Ron says:

    Having lived in Massachusetts for a number of years they have this “wonderful” road tax called an “excise tax” it is basically another way to get money from your pocket to theirs. They tax your vehicle based on its value to drive on the states roads. The amazing part is they send you this bill in an envelope that greatly resembles junk mail, (can’t tell you how many times I trashed it over the years) but it is always followed up very quickly and professionally with interest and DEMAND letters, these always being at a hefty interest rate with quite the hefty associated fees. Call them up, ask to pay, they don’t take debit or credit (guess they don’t want to pay the banks their fees) don’t get it to them on the exact date they want it, they will send it back with even more fees. Lesson here: pay on time, avoid interest and more importantly aggravation , lesson learned here, Candi Thank you!

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