Out of all of the things that I teach my children about money, this one is the most difficult one for me. The reason for this is because children are extremely impetuous creatures and want everything right away. Not only that, but they have a really difficult time seeing down the road into the future. Their idea of the future is what is for dessert that night, or maybe possibly what they are packing for lunch the next day. So how in the world do you teach your children to budget when they have a hard time grasping a long term vision of the future?
As with every lesson that you wish to impart upon your children, starting small is always the way to go. The way that their brains process information denotes that if you want anything to have a lasting impression, then you need to break it into smaller chunks and make the information simplistic.
Therefore, I started with getting them each a piggy bank (although none of them were actual pigs) to put the little bit of change they were receiving into it. Here are some of the first things that I taught them:
- What each piece of coinage looks like
- How much each piece is worth
- How many of them it takes to make $1
Once they had that down, the next lesson was to teach them how much money things actually cost. This requires keeping them in the loop when out shopping. However, the lessons really came into effect when they would ask me for something (as it still does today) so that I could relate how much a thing costs with how much money they currently had.
Let’s take for example whenever they asked for something from the Target Dollar Spot. I would have them look at the price tag, because coincidentally not EVERYTHING is actually $1 there, and tell me how much it said. I would then help them figure out what the tax would be to get the grand total. Then they would have to count out if they had enough money for said item.
They now ask for other things, that are much more expensive, than things at the Target Dollar Spot, but they retained the lesson.
Please don’t think that I would let them bring money to the store every time that we went. Sometimes they would be allowed, depending on how much they had in their piggy banks and what their savings goals were. This is where teaching them about SAVING their money for something they really want comes into play. For me, this was and still is the hardest part to get them to grasp.
Seeing as they have the immediate gratification syndrome, they have an extremely hard time saving up for the big things that they want because they get too easily sidetracked by all of the little things along the way. It really isn’t that much different than the majority of us adults, except that we have a more developed sense of control. Most of the time!
So when I planned my trip to Aruba with my kids this past summer, I told them that they would have to pay for whatever souvenirs they wanted. They had multiple months to save up for whatever these might be but I told them that it might be good to bring around $40 so that they could get 2 or 3 things. I can’t say that my son worked very hard to save anything, because he seems to be my challenge child in this department. My daughter, however, did work very hard at saving her money and was diligent about not even bringing it with her when we were out anywhere so that she didn’t have the temptation.
By the time we boarded the plane for Aruba, she had saved a little over $65 and my son had barely $40. He only had that because his father gave him a $20 because he didn’t want him to not have enough money to buy anything. I personally disagree with this because it isn’t teaching him what I was trying to teach him, but some things about divorce you just can’t change. Reese, my son, did not save his money because he has a real problem with spending it on everything that he sees.
Therefore, the rules now state that you cannot bring your money unless you have any that may be spent at this time. If they are saving for a goal, I won’t let them bring it. My son somehow “found” $2 in his pants pocket just this past weekend and asked me if he could spend it in the vending machine where we were at. What?! Definitely not! That money needed to go back into his piggy bank because he is supposed to be paying his father monthly for his phone plan, not spending it on junk food from a vending machine. This kid is seriously killing me!
I want my kids to SEE how much things cost and how long it takes them to save up to purchase their wants. I want them to learn the value of a dollar, the true value. It doesn’t go as far as it used to, as we all know. When children experience for themselves how long it can take to save up that money, then they don’t value hard work and perseverance as much. These are things that I think are extremely important in the long run to become financially stable adults.
The other part of this equation is that I want for them to save 25% of what they bring in. This is a little bit more difficult with our family arrangement because I have absolutely no control over what they do when they are at their father’s house.
So the best that I can do is to teach them what they need to learn about money, keep reinforcing it when they are with me and hope that it translates when they are in other situations where I can’t be there to remind them. If I continue to teach my kids the lessons about money, as well as showing them by my actions, then the lessons will stick. Children learn by example, so ultimately if we want to teach our children how to handle money more appropriately then we have to show them how we do it effectively and efficiently as adults.
What are some of the most effective tools you have found to teach your children about money and budgeting?
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