Teaching your kids to budget is an important skill for building lifelong financial responsibility. Here’s a few tips to get your kids thinking money management in the modern world;
Get your kids involved in household budgeting
Set a good example for your kids by showing them the basics of how your household budget works. Include them in conversations about how much things cost - for example, using weekly shopping trips as an opportunity to highlight how buying cheaper grocery options can help save money. Encourage awareness of how household services cost money, such as electricity and phone service, and how using these resources responsibly can reduce bill costs. If your family is saving for something special, like a holiday, get the kids involved in keeping track of how those savings goals are going and helping to work out where they can cut household costs to work towards those goals too.
Use pocket money as a teaching tool
Giving kids a set amount of money for which they are totally responsible for (under your guidance, of course!) gives them the chance to practice small-scale budgeting skills in the real world, and it is well known that kids learn best through practicing! It’s a great idea to use a rule of “once it’s gone, that’s it!” to get kids to truly appreciate the value of money as a finite resource - and, if you can stick to that rule yourself, the kids will quickly learn that they have to make smart saving and sensible spending decisions to be sure that they have enough money budgeted until their next pocket money “payday”.
Working towards a goal can help keep kids interested in saving money, and learning how sacrificing cheeky treats can free up funds in their budget to go towards the things they really want. Whether they’re saving for a good book for the holidays, a new bike or working towards their first car (it’s never too early to start!), working goals into the budget will help set a positive money mindset that helps reinforce budgeting basics and skills that will set them up for life.
Budgeting skills are an important part of being financially responsible for life, and teaching kids budget basics from a young age will equip them for long-term financial health, and giving them a head-start in life with this knowledge is vitally important.