Money plays a big role in your family’s daily routine, both directly and indirectly. While many financial decisions are for grownups only, it can be helpful to include your kids in some of your spending strategies and decisions.
Incorporate these 6 tips into your routine and introduce your kids to smart spending in a fun and educational way. As well as demonstrating smart money habits and teaching by example, your kids will naturally learn about how money moves in and out of your household.
- Talk about the roles and responsibilities of money
Money, spending, saving, budgeting, sales, income – these words are such a regular part of our routines that it’s easy to forget that there was a time when we didn’t always know what any of it actually meant!
Take some time to look at money objectively and talk to your kids about all the words and concepts associated with money, to help them understand the way it fits into our lives.
We’ve broken down suggestions of topics to tackle, based on age group, in the table below:
|What to Teach
- Create a family budget
A reasonable budget is based on your regular income and expenses. Teach your kids how your family budget works by sitting down and looking at it together.
The first step is to outline your family income. Next, write down all the monthly expenses, such as your mortgage or rent, utilities, transportation costs, food, and so on. Remember to include a savings deposit as an essential expense!
Work out how much money is left over, after all the expenses have been covered. Decide together how much you can afford to spend on entertainment, clothes, treats, or other things your family likes to do.
- Show your kids what spending looks like
As adults, we know that once we’ve tapped our card on a machine or handed over a stack of cash, it’s no longer ours. But kids might not have the awareness or experience to understand that spending means your bank account gets a little emptier every time.
Help your kids learn the journey of money by showing them your bank statements. If you’re not comfortable with doing that, let them study receipts from the weekly grocery shop so they can see how different items add up to a significant total.
- Provide spending money – and a budget
Decide how much spending money you can afford to give your children each week and set clear expectations on what they’re responsible for paying for.
For example, teach them some saving techniques, like putting 30% of their earnings into savings. Or help them understand the concept of budgeting by encouraging them to plan a savings schedule they can follow to save up for a new toy.
SideKick’s budgeting tool can help parents teach kids how to allocate funds to specific categories. Parents make a certain amount of money available for each purchase type, such as food, entertainment, and travel. With this tool, parents can work with their children to find a budget that fits their lifestyle, while teaching them how they spend their money in a smart and controlled way.
- Save money as a family
Saving is an essential skill for achieving and maintaining financial independence in the future. Since most of us use electronic banking and have a system of automatic transfers to an investment account, we might have forgotten how to save the old-fashioned way.
While teaching your kids how online banking works is important, it’s also impactful to show them how saving works and what saving money actually looks like. A fun way to do this with younger kids is to get a special jar or piggy bank and save up with the whole family!
Choose a general savings goal, such as a trip to an amusement park or fund for a new family board game and encourage everyone to chip in and save when they can. This will create a sense of teamwork and bring added value to your kids’ experience.
Board games are an excellent opportunity to educate kids about financial concepts in a fun and easy-to-understand way. Classic favourites like Monopoly and Cashflow teach concepts such as investing, making money, and budgeting, to help kids learn about smart spending (without even realizing it!).
By including kids in conversations about money and regular transactions, you’ll help develop and grow their relationship with money and spending over time. As well as being educational, it’s a fun way to get everyone on board.