Many families approach money management as an adults-only affair, but there’s no reason you can’t make finances a family activity. Encourage your children to get involved with family spending and saving, and you can teach them valuable lessons — like the three presented here — that they’ll carry with them into the future.
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Shopping is a dreaded chore for many children, but you can turn these necessary trips into a learning experience by getting them involved in product selection. Show your children how similar products can have different price points. With older children, you can show them how to calculate the price per item to accurately compare a package of six granola bars compared to a box of 10.
Take the lesson further by purchasing two or three different brands for the same item and holding a taste test at home. For example, “You save $2 on the generic cookies, but can you taste the difference?” Have teens do some advanced math to figure out the cost of homemade treats compared to their store-bought counterparts. Your children will begin to see those shopping shelves a bit differently.
Show your children how to build a budget. List your essential expenses such as rent, utilities, groceries, and gas. Subtract these expenses from the monthly income and see what you have left. Discuss as a family how you’d best like to spend the surplus. Talk about putting money in savings for emergency situations, then set an exciting goal for any funds that go further than these needs.
Once your children realize that extra funds are going into a jar for your family’s summer vacation, then they may think twice about asking for fast food that will exceed the grocery budget. You can also encourage children to help you cut your utility bills by adjusting the thermostat to ease the strain on your HVAC system or using less water with shorter showers. If your bills go down, put the excess funds in with the “fun” money.
Personal Money Management
Give your child an allowance for special extras such as toys, craft supplies, or treats. Determine which privileges you’re still willing to pay for and which fall squarely on your child. While you don’t want to take away essentials such as school supplies, you can easily get rid of ice cream treats in the freezer and ask your child to pay for these extras.
Walk your children through the process of setting a goal by determining what they want to save for and how to price that item. Figure out how many weeks of allowance are necessary to reach this goal and ask your children to save toward the big prize instead of spending the weekly allowances on tiny treats. Although the lesson is small and simple, it can help create a smart attitude toward money.
Begin teaching your children about money at a young age, even if you’re using only play money and prizes in the earliest stages. They’ll begin building smart habits that will make them savvy savers and careful spenders as adults.