Back to School: Spending
Teach your kids about money!
Summer is over, and it’s time to start learning! Money isn’t a subject we should shy away from, and unfortunately, isn’t a subject that is commonly taught in schools. So, we’re here to help!
It’s never too soon to teach your child about finances – and it’s never too late to start! It’s essential to inform children how to manage money and invest for their future.
We all love to spend our money – that’s why an understanding of money, and the ability to budget and track our spending, is an important skill to teach a child. It’s important for children to recognize that purchases cost money, and money is in limited supply. It’s not always instinct for children to plan ahead, but it’s an essential skill they will need to learn so that they can afford everything they need! It’s important to acknowledge that budgeting always involves making adjustments, so they shouldn’t expect to get it right the first time.
For younger kids: You can teach them about spending by having them experience tradeoffs. Give you child some money and take them to the grocery store with you! Tell them they can choose how to spend their money, but they can’t go over the amount they were given. The point isn’t what they’re buying, but that the child recognizes they can’t get everything – they’ll have to prioritize what they need or want the most.
For older kids: Have them track all of their spending for a week or month. They can do it on a piece of paper, a spreadsheet on Google Sheets, or even an app. At the end of the tracking period, have them evaluate all of their choices. Did they spend more than they expected? What would they like to change? Additionally, ask if they got the most out of their purchases. Maybe they bought an item of clothing and only wore it once, or spent it on an experience they didn’t enjoy. Going forward, they can take note of their unfulfilling purchases and make a choice to not spend their money on similar purchases again. Help them create a target for the next period and suggest ways they can improve. Repeat the process to see how they improve! You may even offer a reward as your child starts to display healthy spending habits and meets goals you agree on!
Next up: Saving – stay tuned to learn more!