Parents have an incredible amount of influence on their children. From what clothes they wear to what foods they eat to what religion they choose, children generally follow the example that their parents set for them.
When it comes to budgeting, there are quite a few wrong ways to do it. Many parents are flippant about money in front of their children, and that sends a certain message to the youngsters.
Many other parents simply do not address the issue of money and managing money to their children at all, just hoping that their kids will “catch on” and figure it out for themselves. It would seem obvious that this is not a great idea.
Teach Your Kids How to Budget Early On
Neglecting to sit down with your children and talk to them about money and budgeting would be a serious mistake. If you don’t teach your kids about budgeting, who knows what financial mistakes they could make in the future?
Teaching your children now will help to prevent them from making the kind of financial mistakes that are very hard to undo later on down the road. Kids need a gentle but firm example of how to approach and manage money from loving and kind parents who want to help, teach, and guide them.
One of the most important things parents can do is to teach by example. Parents cannot expect children to live by certain financial principles if the parents aren’t willing to abide by these principles themselves. If a child sees their parent using their credit cards, second mortgage or a cash advance irresponsibly then they will be more likely to make the same mistakes when they grow up. While each of these can be great financial tools when used correctly, it takes the proper discipline to ensure that they’re paid off in a timely manner.
Begin With a Budget Sheet
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.
During your teaching moments with your children about money, be sure to be calm and patient with them at all times. No matter what age your children are at, it is important that they know that they are able to learn in a safe and inviting environment.
Make sure that they are not afraid to ask questions, or of looking dumb by asking a question. Make sure they know that asking questions is good and is a way to learn, and by no means mean that they are inferior.
Make Budgeting a Family Activity
It can also be a fun family activity to take a trip to the bank and talk about what happens there. It is up to your discretion as a parent as to how much information or how much detail you want to go into at the bank, but it could be a fun and exciting learning experience for your children.
Whatever you might be doing at the bank, like cashing a check or putting money into your savings account, make sure you talk to your children in specifics about what it is you’re doing. This will 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 for their parents, so these types of things can help your children feel comfortable inside the bank and associate it with positive emotions.
Teach The Basics, Like How to Buy Groceries
One of your next stops after the bank can be the grocery store. Show your kids your grocery list and explain to them that you always bring a list to the store with the items that you need; otherwise it is likely that you will buy more than you intended and stray outside your designated budget for food that month.
Have your kids participate in going around each aisle and selecting the items that are on the list. Explain to them that there are different brands of each item and that certain prices are better than others.
Have them look at the unit prices on the tags under each item and teach them that that is where you can see how much you’re paying for a certain amount of an item. Explain to them that you want to get the most product for the cheapest price.
Bring a calculator to the grocery store and have your kids add up each item that they put in the cart. This can help them visualize and understand the concept of staying within a certain budget.
If they’re adding up the items in the cart and the total goes over the amount that you had set aside for groceries, explain to them that sometimes you have to make sacrifices if you can’t afford everything you wanted. Help them put certain things back on the shelf that aren’t absolutely essential.
A helpful learning activity that can go along with grocery shopping is helping your children look for coupons in newspapers and magazines before you shop. Explain to them that not all coupons are useful; only if you were going to buy that item already before you saw the coupon will the deal save you money.
Teaching your children how to budget and to interact with money in a healthy way is one of the greatest gifts you can give to them as a parent. They will have much more success with their finances in the future because of your diligent efforts to help them in this area.