As parents it’s our job to teach our kids about financial responsibility. This means that you shouldn’t feel guilty for not buying junior that much desired video game or little Lilly that doll she’s been begging for. Even if you are a parent who makes enough money for those extras, it’s good to handle a little restraint. Kids are forever watching their parents. Kids comprehend more than parents give them credit for. As you work to practice smart spending habits, the kids will pick up some of those habits.
With that being said, you have to do a little more than just set the example. If you are serious about teaching your kids how to be smart spenders, please continue to read for 4 ways to teach kids about smart spending.
Teach Savings before Purchasing
If your kids earn extra cash for chores then start having them set aside a portion of that allowance each week. With an app like Homey you can easily transfer that amount directly to the kids’ savings accounts so they aren’t tempted to spend it. When you require your kid to set aside a portion of money earned, they learn the importance of saving money. As your kids come to you with wants, encourage them to save for these desires. Sit down and discuss how much the kid has saved, work through the numbers to help your kid figure out how many tasks they would have to do in order to save for their next “want” purchase.
Show Kids how to Find the Best Deals
Work with your kids to teach them how to price match or shop around for the best deal. Part of being a smart spender is learning to comparison shop. Have your kids watch you as you prepare for the weekly grocery shopping trip. Teach the kids how you work to find the best deals and create a list of where to shop based on the lowest priced items. Teaching your kids to find the best deals is the second best way to teach them to be smart spenders.
Create a Mock Profit and Loss Statement
Many kids are visual learners. Each month create a mock profit and loss statement. Sit down with your kids and teach them how to review expenses and income. Have them evaluate where you could cut spending. When you take the time to teach your kids how to review spending versus savings, you are doing them a huge justice. Kids who learn how to evaluate income versus spending will naturally learn smart spending habits.
Consider an Allowance
If your kids don’t currently get a weekly allowance, you may want to consider giving them one. One of the best ways to teach kids smart spending habits is to give them cash for tasks completed so they can start implementing some of the tips shared above. You can make this process fun with the help of a mobile app like Homey – Chores, Rewards and Allowance, that will speak your technology loving child’s language. You don’t have to break the bank to give a kid their weekly allowance, it can be small and vary based on age. When your kids actually have some cash to use on a weekly basis, they are able to have hands on training to be smart spenders.
Each of these ideas, when used consistently, will teach your kids about smart spending. One of the most important life lessons a parent can teach is financial responsibility. With the responsibility of finances comes the need to know how to curb spending habits so your kids can grow up to be financially smart adults.
About the Author – Brandy Ellen Tanner is a Positive Lifestyle blogger who works from home while raising her 3 children. Brandy spends her days writing inspirational content to help uplift others. Learn more about Brandy at BrandyEllen.com.