7 Tricks for Teaching Kids How to Budget
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Financial literacy is so important, but unfortunately, it isn’t taught in many schools. That means it is up to parents to teach kids how to budget.
Fortunately, this is much easier than it sounds. By giving your kids opportunities to practice budgeting, you are teaching them an essential lifelong skill.
1. Let Them Shop for a Meal
Give your kids a budget for grocery shopping for a special meal for the family. Make sure you give them a realistic amount of money but stress that they cannot spend more than you have given them. Instead, they will have to add up costs and find ingredients that fit their budget.
2. Allow Them to Plan a Family Activity
Kids don’t seem to grasp that activities cost money, so put them in charge of planning a family activity. This means giving them a budget and allowing them to find something fun to do with their limited budget. They’ll quickly learn to search for budget-friendly activities, like hiking or dollar movies.
3. Have Them Plan a Party
One of my favorite tricks for teaching kids to budget is to let them plan a party. I gave my daughters the chance to plan a sleepover and set a budget. They were responsible for using this budget to get all the party supplies and food.
4. Encourage Them to Set a Savings Goal
Kids need to understand that there is a real reason to budget. That’s why I encourage my daughters to have a goal in mind of something they want to buy, like American Doll accessories or LEGO sets. If they have a savings goal, they can better understand why they need to budget the money they have.
5. Find Ways to Entertain Them
The best way to teach kids to budget is to fool them into thinking they aren’t learning anything. It’s what the best teachers do! Find ways to make learning fun. For example, every time you play Monopoly or Life, they learn about making financial decisions. There are also several movies that provide valuable lessons about money, such as Blank Check, Confessions of a Shopaholic, and Harry Potter.
6. Set a Vacation Spending Budget
If your kids are anything like my girls, you know the pain of vacation shopping. Every time we walk into a gift shop, my daughters go crazy and want “just one more thing.” And each thing adds up! Instead of giving in to their begging on vacation, we now give them a vacation budget. At the start of each vacation, we tell our girls how much money they have in their vacation spending budget. This money goes towards souvenirs and extra snacks. Once they spend all the money, that’s it.
7. Give Them Opportunities to Earn Money
If you want to teach kids how to budget, you need to give them opportunities to earn money. They can’t practice budgeting if they don’t have any funds! Pay them to help with extra chores around the house and encourage them to look for other opportunities to make money.
What tips do you have for teaching kids how to budget? Share in the comments!
