Leading By Example
As a parent, you have an incredible opportunity to teach your children and teens how to budget, live within their means and even save. In order to set the best of examples, make sure you practice good money management skills so you can pass on these necessary life skills to your kids! If you aren’t setting a good example, chances are your kids will not learn how to manage their money well.
If you teach your children to be thrifty now, you can help keep them from making money mistakes that can haunt them in the future.
Begin by showing your children your budget sheet, and how it all works. Show them what each column means and what expenses go under which column. As you share your budget, it’s important you stay calm and in control. If you convey a sense of equilibrium as you teach, your kids will learn to trust their feelings about money and not spend out of fear.
You might consider making fun and informative trips to the bank to help your kids open a savings account. You can even have a banker talk to your kids about how money works. By including your children in your budget, you can help them feel included and like they’re more a part of what is going on. Banks often have balloons and candy for youngsters who are in the bank with their parents, so these types of things can help your children feel comfortable inside the bank.
You can also let your kids help with the grocery shopping. Give them a budget for a meal, and help them choose the ingredients so they can successfully buy and create a meal for the family. As they get more comfortable with budgeting, you can add extra budgeting challenges. Eventually, you can help your kids understand how much money it takes to feed the family on a monthly basis. By introducing your kids to the idea of a food budget, you can also introduce them to an entertainment budget and help them understand when $120.00 shoes just aren’t in the budget.
As you shop, you can have your kids add up each item, to better their budgeting and how much items cost. Discuss with them the idea of generics vs name brand. If you have an item that you are willing to spend full price, help them understand that an occasional splurge is okay.
You might also enlist your kids in coupon and bargain hunting. You can introduce them to the excitement of the chase.
There are many differing opinions among parents about how allowances should work. Some parents believe that children should only receive an allowance if they’ve done some form of work for it, such as household chores. Other parents think it is best to give their children a small allowance each week, and then leaving it up to each individual child to decide whether to save or spend what they receive. Still, there are other parents who believe that children should get a part-time job as soon as they are old enough. Obviously, there is no right answer as to how to navigate the allowance situation with your children.
Make Budgeting Fun
Something to remember throughout all of your budgeting talk with your children is to keep it light and make it fun. Kids respond much better to learning when they have a fun activity or game to associate it with. Games like Monopoly and other money-related games can help your kids learn about money and budgeting using only cash in a fun and lighthearted way. Another major thing to focus on when teaching your kids about money is the importance of short and long-term goals.
It is important that you emphasize the importance of planning ahead, for big purchases or even retirement. Talking to them about saving for specific things that they want can help them work towards a goal. When they eventually earn enough to purchase the item that they wanted, it solidifies in their mind that they are capable of saving and that it is possible to buy the things they want. Teaching your children how to budget when they are young will help them become more financially wise and well-rounded adults.