3 minute read
Teach your kids how to work with a simple budget and make it fun!
- Start with a budget
- Use a wish list
- Learning to save is important
August is National Back to School Month and presents a great opportunity to talk to your kids about money. Remember when you were a kid and excited to return to school to see your friends? Many kids return with new clothes, a backpack as well as lots of school supplies. Back to school shopping is almost a rite of passage, but can be financially overwhelming to parents.No matter what your financial situation, everyone needs a budget.
Create a budget with your child
Involve your child in this real-life exercise. Sit down with them and create a realistic back to school budget. Start with a list from your child’s school. Depending on your school district, requirements will vary. For example, the school supply budget for a child entering second grade will differ from what's needed by a high school student.
Write down everything on the list and estimate the approximate cost. Have your child comparison shop online or your local newspaper circular. Make a game of it and perhaps reward the child who can complete the list with the best prices. Comparison shopping is a way to teach children that the choices they make have future consequences. It also introduces the concept of opportunity cost: If you buy the most expensive backpack you cannot buy other items on your “wish list.”
Teach kids to save with a wish list
Make sure you leave a little money in the budget for “wish list” purchases. Beyond the must haves there are always things kids want that are not absolutely necessary. A wish list is just another way of writing down their financial goals on paper. Have them comparison shop for these highly desirable items and then add up the total. It may surprise them how much these extras cost. While you may not be able to say yes to everything, it presents a good opportunity to brainstorm how they might pay for these extras. Try not to undermine your child's ability to save by purchasing everything on their wish list. Have your children check their Family Money Vault--have they saved anything? If not, are they willing to do some extra chores around the house to increase their savings? You can help your child get the things they want by teaching them to save. Children know how to spend. But there's great satisfaction to be gained from saving as there is from spending if they understand the payoff. Your child may find the road to financial literacy easier once saving becomes a habit.
Consider Giving Back
Families have different financial situations and budgetary constraints. However, charitable giving is an important lesson for your child to understand. Parents want children to understand the value of giving and experience the sense of purpose and joy that giving brings. However, in order for these values to take root, it is important to plant the seed early. Back to school time is a good opportunity to help children in need. Discuss with your kids what type of items they think are important to be successful in school. Perhaps purchase an extra back pack and fill it with school supplies to donate. Go shopping with your child and have them pick out items to put in the backpack. Depending on the age of your child, they may want to take the lead and organize a school supply drive. There are multiple components to hosting a school supplies drive. It is best to start planning early and be sure to speak to the school administration. School officials may know what is already underway in your community. So whether the kids choose to donate a few supplies or want to get involved on a community level, it is a sure way to help your children take the first steps in charitable giving.
Teaching kids to budget is an essential part of financial literacy. Integrating back to school purchases in a fun, interactive way helps them put their budgeting skills to good use.
Help your kids learn to budget. Try Family Money free for 30 days*
*$5.99/month charged thereafter unless you cancel before the trial ends. See Trial & Auto- Renew Terms.