We’d be willing to bet that one of your resolutions for the upcoming new year involves money—either spending less, saving more, or some combination of the two. Why? Because 25% of people who responded to a Nielsen poll last year said that one of their top resolutions was to spend less and save more (behind staying fit and losing weight, naturally!)
There are lots of good reasons to make personal finance a focus for the new year. You may have debt to pay off, you want to be more diligent about saving for the future, or you feel it’s about time to create a “rainy day” fund. Or perhaps you just want to figure out where your money is going every month!
Whatever the case, involving your family in the budgeting process can create a sense of empowerment for each person, and it could also be a great opportunity to teach kids about the practical realities of day to day spending and saving.
What can young kids learn from budgeting?
- How much basic needs cost
- The various spending categories (housing, food, clothing, entertainment, taxes)
- How to prioritize the way money gets used
- The difference between needs and wants
- The value of waiting for something they want
As you work on your family budget, invite kids, depending on their age, into the conversation. Share only what you are comfortable with! If they are very young, you might encourage them to divide their allowance or any money they received during the holidays or birthdays into Spending, Saving, and Giving jars or envelopes. This will help them see that there is only so much money to go around and that they can decide how much to use for each thing.
If your kids are older and receive an allowance, you can talk to them about the year ahead and ask questions like “Are there any big things you want to save toward?” and discuss what they use their money for. Ask them, “What is important enough to buy?” Helping kids consider this concept will set them up well as their “wants” increase. It’s not a bad idea to introduce and encourage giving as well.
All kids can benefit from budgeting for shared goals, like a family vacation or big-ticket item that benefits the whole family. You can talk together about how much the thing costs and agree on a percentage each of you will contribute from your earnings each week or month to the goal. You could even create a goal chart with a photo of the thing you are saving toward and a meter that you can color in so everyone can see the progress and celebrate when the goal is reached.
Does your family budget together? Share your favorite resources or tips with fellow readers below!