Who ever really wants to talk about boring ‘ol budgeting? Well, apparently, I do. But, believe me, I get it. Budgeting can be mind-numbing, not to mention stressful, especially when all the plans you make for your own money never quite turn out the way you thought.
How the heck are we supposed to teach our kids about money, when we don’t have it figured out ourselves? And, will kids even care or pay attention to this kind of thing?
I know. It can be absolutely overwhelming, but it doesn’t have to be. For your sake (and for your child’s), the key is this: keep it simple.
Sounds cliché’, I know, but trust me, it’s important. The more complicated we make things, the more our kids will tune us out, and the more likely they’ll be to give up on the idea of budgeting even before they reach an age where they’ll actually need it.
So, I’ve made it nice and simple for you. I’ve got 5 great ideas here that you can use in your every day life to start teaching your child about budgeting, because believe it or not, it’s never too early to start instilling healthy money habits (and maybe you can learn a thing or two along the way).
1 - Have them pick out the next birthday present for a friend.
Give them a budget, and don’t let them go over that amount. Because they’re spending money on something they care about, they’re more likely to remember the lesson. Help them understand that you only have a certain amount of money available right now to spend, and that even though you may like to buy their friend the latest $200 super awesome Lego set, that would mean you may not have enough money left over that month to pay for groceries.
2 - Show them the next bill that comes in the mail.
Talk about whether it was more expensive than you thought, less expensive, or just what you were expecting. Bonus: depending on which bill it is, ask them if they even realized that it costs money for that. For example, they might not realize that it costs money to have running water or electricity in our homes. It can make them appreciate what they have more, and perhaps think twice before they leave the lights on when they leave a room.
3 - Have them divide their money into three categories: Give, Save, and Spend.
K, this is a biggie, and may sound like more trouble than you want to be bothered with right now. But, what better way to teach your child about budgeting, than having them budget their very own money? It’s a super powerful and helpful practice. And, if you need help getting started, I’ve got a whole lesson devoted to it in my “Financial Literacy for Kids” online course.
4 - Let them plan the next family outing.
Does your family enjoy going out to the movies? Museums? Sporting Events? Tell them how much they have to spend, and put them in charge of planning everything out. The only rule is, they can’t go over the budget.
5 - Put them in charge of not overspending at a restaurant.
I love to eat out, but I know it can get very expensive. Do you have trouble with spending too much at restaurants, too? Next time you’re out to eat, put your child in charge of keeping track of what you spend. Start by telling them how much the budget is for the meal, before you order. Figure out what everyone would like, and add it up. Don’t forget tax and tip! If it looks like it will be over-budget, talk about choices. Should we skip the soda or juice tonight? Do we have to order dessert, or could we have a treat when we get home instead?
There you have it! Simple, right?
It’s important to include these types of conversations into your everyday life, because let’s face it, if you think you’re going to find time, after everything else is taken care of, to sit down and have a whole budgeting lesson with your child, you’ll just continue to be frustrated and overwhelmed.
But, by simply including it in activities that you’re already doing, it makes it possible, and you know what? Your child will remember the lessons better, because they’ll see that budgeting is, in fact, something that you use in everyday life (unlike certain other subjects they learn in school, which shall not be named).
So, guess what? You’ve already got a great start! Good job! You read this entire article, and now you have some great ideas for talking to your child about budgeting.
I’m proud of you! I really am. The world needs more parents like you who actually care about their child’s financial future.
It’s going to be awesome!
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