How to Teach Your Child About Budgeting
As a parent it is your primary responsibility to equip your children with life skills. Learning how to properly manage a budget is one of life's most valued skills; both spending and saving habits can be taught early on. If you show them an appropriate balance between the two, you can save them many years of financial difficulty.
1.Be a role model. Allow your child to see you budget, comparison shop, and save. Bring them to the bank and let them watch you put money in a savings account. Explain to them what you are doing while you are doing it. Ask your child to help you find and read the unit price numbers at the grocery store in order to find the best bargains. You can also give them a budget and ask them to come up with a grocery shopping list. Have them look in the kitchen cabinets and refrigerator to figure out what the family will need for the coming week, then review the list together with them before going to the grocery store. While shopping, hand them a calculator to see how close you are to your budget as you add more items to the shopping cart.
Encourage them to look for coupons and sales in weekly fliers.
Review the family budget with your children, especially if you're also trying to teach them to help cut down on expenses by doing things like turning off lights when they leave a room. This step requires quite a bit of trust. Explain to your child that details of the family budget should not be discussed with friends at school.
Plan the family vacation together with your child, assigning them the task of researching air fare, hotel rates and rental cars.
2. Give them places to put their money.
Buy a piggy bank for younger children so they have somewhere to keep their money temporarily.
Employ visual aids such as labeled glass jars for older children so they can separate their money into different budgeting categories.
Open a savings account so they have somewhere to save