For a family, it is all-hands-on-deck when it comes to budgeting. All members need to have an active role in saving money, and it is never too young to start learning how. Whether your child is two or 12, parents and guardians need to teach the younger family members the necessary financial skills that will carry them through life. There are many ways to include your family in financial decision making and budgeting. However, it is important to remember to start small and build up from there. Here are some of my favorite ideas for making saving money a family affair.
- First, kids need to learn where money comes from and how to earn it. When a child understands that receiving money is closely tied to working, they’ll hopefully be motivated to save the money they earn. Having chores is a common way to teach this life lesson. Create a chore chart with age-appropriate tasks and a pay rate. For example, loading the dishwasher might be worth 50 cents or folding the laundry might be worth 75 cents. Give your child a goal, either financial (i.e., earn $5.00) or timeframe (i.e., every two weeks), to accomplish. Once achieved, they can cash in their earnings and start from scratch. Another avenue for kids to obtain money is by selling handmade items. When I was younger, I created cards and sold them to family members. Many children set up lemonade stands or hold bake sales. Get creative and make sure whatever activity you choose, your child enjoys it. Learning that work can be fun is a valuable lesson to understand at an early age.
- Once a child receives money, the next step should be separating it into the three money jars: saving, spending, and sharing. Several rules of thumb for adults include dividing their earnings 50-30-20 (50% towards necessities, 30% to wants, and 20% to savings) or tithing 10% of their total income. For children, separating between the three jars might be a little different. Always start out with a goal, either long-term or short-term. Discuss with your child what they want to purchase now, for what they want to save, and with whom they want to share their money, such as a cause or organization. For example, your child might choose to immediately buy a candy bar, save for a new bicycle or car, if older. Then, they decide to share a portion of their income with the local animal shelter, their church, or national park. Parents and guardians can help kids take ownership with deciding on where their money goes and how to avoid impulse purchases. Take time each night or a couple of times a week to count the amounts in the three jars. Also, talk with your child about how much more they need to save, earn, etc. for a certain goal. Lastly, put an emphasis on giving back. Stress that no matter the amount, the giver and recipient will gain something positive from the experience. The more children are involved in making financial decisions, the more they learn and absorb.
- Speaking of getting kids involved, take them on grocery store runs, bank errands, and more. Include them by letting them hold the coupons for the grocery store, or sitting in on a discussion with a financial advisor about how to save more money. Be aware that the examples you set with money should be positive and healthy. When discussions about finances become strong and angry, change the tone to show your child that money isn’t always negative.
- Lastly, part of getting kids involved means teaching them about contentment. This skill is important for children to learn young and can prevent headaches later, especially when it comes to the teenage years. For example, parents of a 16-year-old might hear “Sam just got a brand-new car. Why can’t I have one, instead of driving a 20-year-old one?” Having the newest and latest items comes with a cost and children need to realize that. With contentment, it all starts with the heart. Parents and guardians need to show children how to be grateful for what they have and that material items aren’t the end-all, be-all.
Budgeting and saving money isn’t always a fun task, but it is something that must be done. Learning the pivotal skills early are essential for children. However, if it is to be successful, it is also essential to make the process fun and exciting.