There are effective ways to school your children about budgeting aside from sitting them down and lecturing them about how hard you work for your money. The best way is to make them experience what it feels like to make money, and then give them the chance to manage it.
First, make them earn their allowance. If your children are given an allowance just for the sake of getting money, you will just be like ATM dispensing money. If they have to earn their money by doing the dishes or raking the front yard, they will easily understand the correlation of work and money, and learn just how valuable they are.
Second, don’t budge if they exceeded their budget and ask your for more money or an
“advance” on their allowance. If they go to the mall and spend all of their money on a video game or a Star Wars action figure, tell them that it isn’t your problem that they bought things that they should have saved for. This teaches them to delay their gratification and control their impulse to purchase unnecessary things. If you cannot resist their crying or pleading eyes, you can give them extra work and make them earn their money.
Third, bring them to a bank to open up a savings account. This will show them that financial institutions and money are serious business. The formality and professionalism in a bank will give them an appreciation of money’s importance and stature and teach them to respect finances. Make sure however, that you keep any ATM or debit cards that are issued in conjunction with the account. They can make their own withdrawals as long as you are there to supervise.
Fourth, when you take them to supermarket or grocery shopping, do things that indicate that you are serious about saving money. Compare products and explain that you need to determine how you can stretch your dollar by getting value for your purchases. On the other hand, try not to bring them on shopping trips with your friends or relatives where you spend money loosely and extravagantly.
Fifth, bring your children to your place of work or business. Show your children that adults work hard for their money and they are serious about making it.
Remember that children will not make budget lists or listen to you intently if you sit them down and talk about financial planning and budgeting. At a young age, children will respond more positively to real world experiences and examples.
