Child experts say that it is never too early to teach your children about budgeting but some parents may argue about this.
Child experts say that it is never too early to teach your children about budgeting but some parents may argue about this. There are two positions when it come to the issue of kids’ involvement in family budgeting – “yes, involve them” and “no, they shouldn’t know anything about it”.
I agree with those who say that kids should be involved in family budgeting. Money is not something evil that kids shouldn’t even touch them. I’ve heard some parents make rationalizations on their decision not to involve kids. Some say that kids shouldn’t be bothered about serious things like money matters. Others think that kids will not understand. Many even say that they don’t want their kids to worry about money. There are all sorts of excuses. But then maybe that’s just what they really are, excuses.
Study shows that kids actually worry much more than their parents think. Do you know that one of the things that they worry about is money? It’s true, many kids worry about the financial situation of their family. So there’s really no use hiding money matters from them because they would still worry.
Kids are smart so it will be easy for them to understand the mechanics of budgeting if parents just patiently guide them through it. Helping them how to budget money even when they are still young will help make them responsible spenders in the future.
So how do we teach them about budgeting?
Teaching your kids about budgeting doesn’t have to be a complicated process. Just keep it simple and casual. You don’t need to set up a classroom in your home just to be able to teach them how to budget.
1. Show them the money.
Young children need to understand this whole concept about money because for them it is something really abstract. I once heard a mother say “you need ten of this paper and two of that other paper to buy this doll”. It was really funny but I think it was effective because I heard her daughter say that she needed to save more so she can buy the doll. Teaching kids about money has to go beyond the textbooks. Sometimes when you’re at the supermarket, let them pay for some small items so they will get a feel of how it is to handle money.
2. Help them visualize.
Explaining things verbally wouldn’t work with young kids because they will not be able to completely understand what you are saying. Use graphs or charts while budgeting so they can visualize what you’re saying. If you want to be creative, you can even use a pizza pie.
Tell them that the whole pizza represents your family’s money for a month. Ask them to help you make a list of all the things that your family spends on every month. Then start cutting the pizza and tell them that each slice represents a part of the family’s monthly expenditures. Prepare envelopes and mark them with the correct labels. Ask them to put the right amount of money in the envelopes. If there’s still money left, tell them that it will be put away as savings.
3. Teach them how to manage money.
Give your kids a weekly allowance so they will learn how to manage money. Tell them that they are free to use their money however they want. But if they want to buy anything that is not a need, then they would have to use their allowance to buy it.
If the price of the thing that they want to buy is more than their weekly allowance, then you can teach them the concept of saving. Tell them to make wise choices so they can achieve their goals. Remind them that if they buy things impulsively, they will not be able to buy the thing that they really want.
Do you have other ideas on how to teach budgeting to kids?