5 Tips For Teaching Your Kids How to Budget
Raising a child to develop foundational healthy habits is a difficult yet rewarding process. As your children grow up, you’ll likely want them to understand the importance of both spending and saving wisely. Teaching your kids how to budget from a young age is a great place to start if you’re hoping to help them cultivate frugal practices for the future. Consider these five simple tips as you start showing your child how to budget.
Give them an allowance
Most parents decide on a regular allowance for their kids once they reach a certain age. Besides teaching your kids that hard work pays off, giving them an allowance is a great way to teach them the importance of budgeting their funds. When you agree upon a set allowance amount, be sure to also explain to your children the values associated with saving their money.
Whether you pull up the value of toys they would like to save up for, or show them what their piggy bank could look like should they wait to spend their cash, make use of analogies that will be meaningful to them.
Allow them to shop
Allowing your kids to shop for themselves might seem daunting at first, but it can actually be foundational when it comes to their understanding of money. Consider permitting your kids to pick out their favorite groceries or to choose some new outfits for themselves. Help them calculate each item to show them how quickly the things they want most can add up.
If you give them a set amount of spending money for back to school looks, encourage them to shop second hand to get more of a bang for their buck. Your kids can find trendy name brands like Lularoe at online consignment stores like thredUP, or even spend a day perusing fun finds from a local thrift shop as well!
Encourage Goal Setting
Encourage your kids to set goals for the items they want. Whether you help your kids set individual goals, or you work towards collective goals to improve your family’s lifestyle as a whole, you can never go wrong with teaching your kids to work towards something positive. From creating a savings and budget chart, to simply helping them count out what they currently have stocked up, there are many goal setting options. It’s important to teach them to keep track of the money they have.
While your child might be immediately tempted to spend that twenty dollar bill, remind them of the other things they could purchase that they want even more should they choose to hold on to the cash. If your child works hard to save up for something big, like a bike, reward their self-discipline by spending your own money on a helmet to go with it. Praise the goals your child has set and they will not soon forget how good it feels to save their money.
Lead by example
Though this tip might seem as though it goes without saying, leading by example when it comes to your money is a must. Your children observe and digest all of your actions on a daily basis, including your impulse purchases. If you are someone who tends to be tempted by the clearance items in the back of the store, or the candy bars at the checkout, it’s important to be mindful of what those purchases might imply to your kids.
While it’s never wrong to treat yourself or spend your money on items you know you can afford, be sure these exceptions are also being conveyed to your children. Make it clear to your kids that you work hard to be able to purchase things for them and for yourself. Try bringing them to work with you for a day the next time you feel they need a reminder of all that it means to earn your own money.
Practice contentment
Last but not least, teaching your kids how to budget goes hand in hand with teaching them to be content. No matter what neighborhood you live in, or what car you drive, there are always things to be grateful for. Cultivating a mindset of contentment at home with the things you already have is a great way to help your kids understand that budgeting doesn’t necessarily have to be something that is confining.
Rather, budgeting helps teach your children to live within their means and be grateful for the money they might even have left over when all is said and done. The next time your child has their eye on a specific toy, enact the buy one, give one rule. Every time your kids go to purchase a new toy, tell them they must first donate an old toy. This method will help them learn to be content with less instead of excess.