I recently did a post about a “Pay Per Performance” Chore Chart. This is a good way to teach kids about earning money. Once they have the money though how do you teach them to use it wisely. This is something I struggled with myself. I got my kids to earn the money they got but once it hit their hot little hands it was gone in a flash. Then they were asking for stuff in the store and I’d break down and buy them a little treat or think, well they earned it. Wrong, all that taught them was that if they spend all their money mommy will still get them stuff.
The biggest hurdle for me personally was learning to say no and sticking to it. Instead of lecturing them for nagging me about stuff in the store, I’d simply ask “Did you bring your money?” Most of the time their answer was no or “I have it but I’m saving up for a video game”. This is good, this is progress. After a while they stopped asking me for stuff at the store and started setting goals. Which brings me to my next point.
Setting goals. The kids might like to go out and buy cheap dollar tree toys or an impulse buy at the the grocery store but the excitement of that item rarely lasts. Something like a video game, a bike, a game system, even a new Nerf gun, that usually lasts a little longer has a more lasting impression. If your kids get a smaller allowance (say $10 or $20 every two weeks) it would take them quite some time to save up for a new bike or a trampoline. It would seem almost an impossible task for kids and they may give up before they reach their goal. I countered this offer with the kids. You want a new bike? You save up half the cost of the bike you want and I’ll pay the other half. It’s still a lot of money for a kid to save but it keeps them on task. You can even budget that yourself and say I’ll pay half, up to $60 on my end, for a new bike” So if your kids have their eye sites on a $500 bike you’re not stuck with a $250 surprise. But if you’re budget allows for that, then go for it. We’re actually dealing with this now with my oldest son. He wanted a new bike. He saved $55 of his own money, I paid the other half and this is what he got. He chose the bike in the budget allowed. We also talk to our kids about figuring taxes. They’re learned to do this in their heads at this point. They know they have to cover the cost of the item AND tax.
Lead by Example – If your kids are seeing you out shopping daily or frequently buying unnecessary things they may think that’s ok. Make sure you talk to your kids about paying important things first and setting money aside then the rest you can have fun with. Teach kids the better bargains in the store. When they ask for a certain toy, comparison shop online and let them see the price differences. They’ll definitely want to spend less to keep more of their allowance.
Teach Them the Difference Between Want and Need – You’ve probably heard it, especially with your teens “I NEED Under Armour shoes, everyone else has them” No dear, you don’t NEED Under Armour shoes, you need shoes, you WANT Under Armour. Maybe they think they NEED a cell phone. In today’s day and age, that might be true, but it might not be too. You know what’s best for your family. I also occasionally read my kids stories when I see things online or articles in magazines regarding underprivileged children. Yes I’ve shown my kids pictures of the starving kids in Africa. I’ve also had them help pick out toys for Toys for Tots at Christmas time, go through their clothes to donate to local families who lost everything in a fire, etc. I use these opportunities to talk to my kids about how lucky we are and how our every day conveniences are only a dream to some.
I could write a lot about budgeting for adults and families. I’m sure I will. In the mean time, you can read my guest post at reedmantollchryslerdodgejeepram.com blog on how to shop for a vehicle for a family of 6. Yes staying on budget is important but so is getting the right vehicle for your family. I spent nearly a year researching vehicles with things I wanted, needed, budget friendly, best gas mileage for the size, and appropriate for my family.
What are your tips for teaching your kids to budget?
