There are ways to show your kids how to spend their money responsibly at each age.
Teaching your kids to spend money responsibly might seem like a simple process but the truth is that it can be tricky. Spending money is an important part of dealing with money but you want to make sure your kid knows when to spend and when not to. Teaching a kid how to spend money can teach them independence but it is vital to include responsibility in the process.
There are ways to show your kids how to spend their money responsibly at each age.
Explain Budgets
Budgeting may not be the most fun part of money but it allows you to spend your money where you like while also making sure any necessary costs are covered. You can help your kids budget by creating an incentive chore chart. Set up a system where they can earn money for the chores they do and then let them decide what they want to do with the money: save it, share it, or spend it.
If your kids make money from jobs like babysitting or other situations, help them understand how to manage that money while giving them a sense of ownership over the money.
Teach Independence
If you have shown your kids what a budget is and how to use one, then the next step is to give them the choice on what they spend their money on. Giving kids the space to make their own decisions over how to spend their own money will empower them to make strong financial decisions when they are adults. Financial independence is an important discipline you can give your kids. To create independence yet structure in their money handling, put together Save, Share, and Spend jars where your kids can choose where to put the money they earn.
Reinforce Responsible Spending Choices
Spending money isn’t just for fun things you want. Make sure to explain how responsible spending is about using your money to cover the things you need first. You can do so by rewarding your kids for making smart spending choices. If they choose to save their money to spend on something later, you can reinforce that by offering a prize or reward when they reach their saving goal. This helps encourage thoughtful spending habits from your kids rather than mindless spending.
Spend Money with Them
Lead by example by showing your kids how you spend money. Show them how you use cash at the store or include them when collecting and using coupons. Show them the difference between spending money with cash in person and using a card for online purchase. Including them in the process will help them understand the different factors you need to consider when spending money.
Making spending decisions as an individual is difficult but adding in children to consider can make the process more complicated or difficult. Making sure your kids know how to spend money responsibly starts with your own spending habits. If you need help learning good spending habits so that you can teach your kids the same, contact a Mary Rigg Financial Coach for help.
