Note: Today we are pleased to bring you this guest post from Addie Ganley. She blogs over at Frugal Fanatic, where she offers plenty of practical advice on both saving and spending money wisely! We think you’ll benefit by all the good stuff she shares with us today – thanks, Addie!
I believe that learning financial responsibility and budgeting starts at a young age. We focus on teaching our children how to read, write and do math, but are we putting enough emphasis on providing them the skills they need to budget and learn how to make wise decisions with their money?
Learning the value of a dollar and how to budget is extremely important. As parents we want our children to grow up and live a happy, yet successful life.
When I was younger I was taught about money. I was taught in school how to count it and how to pay for items with money, but never how to be responsible and save it.
Luckily, my parents were able to teach me how to be financially responsible and make savings goals for the future.
I believe this is one of the reasons why I am so frugal today. This is definitely something I want to pass on and teach my children. Below you will find some of the ways I am teaching my boys how to make smart decisions with their money.
1. Like my parents, I am teaching my kids about having particular savings goals. Even though they are young they still understand that you need to save money in order to make purchases. This also helps to prevent the constant nagging and asking, “Can I have this,” when we are out shopping. They each have a particular item that they are saving up to purchase. For example, my oldest son has been wanting a monster truck remote control car. We made this his savings goal.
Each time he gets money he puts a portion of it away for this particular item. Once he reaches his target amount my husband and I will take him to buy it. Not only is he learning to save his money, but he is learning the value of a dollar because he knows that once he makes this purchase his money will be gone.
2. Another way that we are teaching our kids about making wise decisions with money is by including them into our financial discussions. Each year we take a family vacation and our boys know that we save money in order to pay for it. We sit down and discuss with them how we need to make smart decisions with our money in order to have enough to go to the beach.
Throughout the year we try to show them that we cannot buy everything they see at a store because our extra money was going towards our vacation fund. This helps them grasp the concept of having a budget and the impact that the money has on our vacation. I will say that you do need to be cautious though when having these discussions because you do not want to burden your children or have them worry about money. We like to make it fun and keep a jar for them to help contribute to.
3. Not everyone agrees with giving an allowance, but this is something that we do in our home. There are required tasks that my boys are expected to do that they do not receive an allowance for, and then we have more in-depth tasks that they complete and get paid for. Like I mentioned before, my kids are young so the jobs they complete are age appropriate.
My husband and I give them a weekly allowance and they get to decide how much to put into their savings jar. This is where those savings goals come into play. More often than not my kids will put all of their allowances into the jar because they know they will be able to make their purchase sooner.
I know that my attitude and outlook about money can affect my children. I want them to have a good impression and learn the skills they need to make smart decisions with their money when they are older.
How are you teaching your kids to be financially responsible?