It is very important that we start implementing budgeting for kids at an early age. In my household, we have been overhauling our budget and getting more focused and dedicated to planning and properly utilizing our income. We all know kids don’t really care about budgets. They see things, they want them, they expect their parents to come through to make it happen. This is why I felt the need to focus on budgeting for kids. What if we challenged that paradigm and taught our children the value of budgeting and choosing what to allocate your money towards?
In the posts “How to get your Budget in Check” Part 1 and Part 2 we set the groundwork for gaining control of your finances through purposeful strategies. Here, we want to include the whole family in our budget endeavors. We want to focus on teaching our kids about budgeting. Because after all, the family who budgets together stays together…..(I totally just made that up).
Set the example
Firsts things first, you have to be the change you want to see. Your kids look up to you for everything in their lives, budgeting should be no different.
The best way to learn is to do. Give your children ample opportunity to earn money and make budgeting decisions. Notice I said earn money (you should not just give them money, just because). When your child has completed their chores or whatever task you have set forth, they can be compensated for their work. This is how they will earn their money,
Allow them to set money goals and work towards it. For instance, If your son wants to buy a new remote control car, help him set a monetary goal and provide opportunities for him to work towards it. Once the goal is met, take him to reap the benefits of his hard work and set the next goal. Goal setting will provide your kids an area of focus for their budget.
An important aspect of teaching kids about budgets is giving. Show your children that they should be givers. They shouldn’t keep all of their money to themselves, instead teach them the power and importance of giving. I really enjoy this part because you get a chance to see where your child’s heart is based on who they choose to help. A word of caution here is to not allow them to help mom or dad. Although this is very sweet, encourage your child to be a blessing to a person or organization outside of your household. Important lesson are learned when we are givers and children learn that we can work to earn and work to help others.
Allow Them To Make Mistakes
This one may be the most difficult! As parents, we naturally want to shield our kids from making mistakes. But, who learned to ride a bike because their parents stopped them from falling off? NO ONE! Let your kids make financial mistakes, let them purchase something that is priced too high, let them give away all of their money and have nothing left for themselves. Then, use it as an opportunity to help them learn and grow to make sound decisions in the future. It is better for kids to learn about money and make mistakes while the risks are low than to become an adult making
Dave Ramsey has a great list of how to teach kids about money at different ages. The learning should never stop and should get more complex as kids age. If we can get in the habit of teaching kids about budgeting and teaching kids about money, we can break cycles from the past. We can raise children who are money conscious and well equipped to financially navigate life.
How do you teach your kids about budgeting?
Keep doing (the best) you boo!