4 Helpful Tips to Instill Good Financial Habits

Are you a spender or a saver? Use these tips to assess your own saving and spending tendencies, and, if necessary, make some adjustments to ensure you’re passing down positive money-management habits.

by NEA Member Benefits


Would you consider yourself more of a spender or a saver? Or have you found a sweet spot in between the two extremes? Wherever you may fall on the financial personality scale, the generations behind you are watching and learning from your actions. Are you setting the best example of how to be a financially responsible adult?

Are you a saver or a spender?

Some people are serial spenders. Their money is not comfortable unless it’s actively and consistently propping up the retail economy. These people buy today—often whether they need the stuff or not—and they’ll worry about tomorrow…well, tomorrow.

Their extreme counterparts are the super savers. These frugal folks know where every dollar is and what it’s doing there. They follow budgets, balance their checkbooks every month, and fund their retirement plan before ever splurging on a Grande Mocha Frap.

You probably fall somewhere between these two extremes, but may lean more heavily towards one or the other. Understand that your financial habits and attitudes about money likely came from your parents and other adults in your life and were formed when you were very young. And now you’re the one setting the examples for your kids. You have a responsibility to recognize your own saving and spending tendencies, and, if necessary, make some adjustments to ensure you’re passing down positive behaviors.

Get ‘em when they’re young

If you have young children, you have a golden opportunity to imprint good financial habits that will serve them well the rest of their lives.

  • Talk openly about money and teach kids the value of a dollar. Get them prioritizing needs so they recognize that spending money is about making choices, and you don’t automatically get everything you want.
  • Live within your means. Use household budgets to make smart spending choices and discuss your decisions with your children. Show them the difference between generic and name brands. Negotiate better prices where appropriate. Explain the value of fixing something that’s broken rather than always buying a new replacement. This kind of responsible behavior pays dividends for you and your kids.
  • Teach savings habits. Paying kids to perform certain chores teaches them the value of work. Showing them how to save a portion of what they earn teaches them the value of investing. Encourage saving by matching their contributions to the piggy bank. Show them how their money grows and why that gives them opportunities to get something they want if they’re willing to wait a certain period of time.
  • Explain investing basics. As kids get older, diagram compound interest and explain in simple terms how investments grow over time. Help them establish goals and let them use portions of their compounding savings to satisfy short-term desires so that investing becomes tangible.

Keep on teaching into adulthood

A recent survey about retirement saving and planning attitudes among Gen X and Gen Y educators* found that Gen Y millennials were twice as likely to use their parents as a source of financial advice than Gen Xers. Young adults in their 20s are still developing an appreciation for and understanding of money management, and you can be a strong role model for how they save and invest going forward.

Realize that millennials are entering the workforce with more financial challenges than previous generations. Many are burdened with student loan debt and may be struggling in a difficult and somewhat stagnant job market. It could take a little more effort to get them to see the value in saving. But they are primed to listen to your advice.

The bottom line

In the financial classroom of life, you have a lot of influence over how your young children, or, as the case may be, your young adult children, view and appreciate saving and investing. This teaching position might even spur you to adjust some of your own less-than-stellar money habits. You just might find yourself on a better path towards your own goals while you experience the satisfaction of seeing your kids grow up with a lot more financial security and independence.

*Research conducted by Greenwald & Associates, an independent market research firm, and sponsored by Security Benefit, on behalf of a consortium of financial services companies. Participants consisted of about 500 K-12 educators, mostly classroom teachers, between the ages of 21 and 48, with household income of at least $25,000 if single, and $50,000 if married, and who participate in their household’s financial decision-making.