Planning a family budget is essential these days. And it’s always wise to include kids in the process. But lectures are extremely difficult for kids to understand, particularly when it comes to money. Money has become a much more abstract idea in the age of credit and debit cards than it was when we were children.
Money has become perplexing and enigmatic to adults, let alone young kids, as a result of this. Any approach that has your children physically involved in the family budget is going to be the best way to involve them in the family budget.
The lesson is much more likely to stick with children if they feel like a respected part of the conversation and can see and touch your family’s goals. Remember that “monkey see, monkey do” is the default setting for all developing minds!
If we talk about money with our kids infrequently or make it clear that it’s an awkward topic for us, our kids will understand that money is mysterious and frightening. Your five-year-old doesn’t need to know how much money Mommy and Daddy make; it wouldn’t make sense to them anyway.
Lets understand seven ways by which you can involve kids while planning a family budget.
1. Have Regular Money Conversations
To give you an example, I don’t recall our family ever discussing money when I was a kid. I never asked my father how much he made at his job because I had no idea.
I just knew we had a home, food in the refrigerator, and vacationed nearly every year. But for saving up for the new gaming system or a pair of basketball shoes, I had no idea how money worked.
Regularly discussing money with your kid is one of the best ways to get them interested in the family budget. Asking questions during family meals or car trips may be an example of this.
The more you speak to your kid about money, the better their understanding will become as they get older. Furthermore, discussing money would no longer be frowned upon as it was in previous generations.
2. Find Appropriate Areas Of Your Budget To Discuss
Break down your budget and identify areas that are appropriate to discuss with your children. You are unlikely to let your kid determine how much money goes into your retirement plans or investments.
However, you may enlist their assistance in creating your weekly grocery budget or selecting your next vacation destination. Entertainment, eating out, travel, clothing, birthday and streaming services are all budget categories where your kid could be involved.
This simple technique will surely arouse your kids interest in planning a family budget with you.
3. Set Money Goals Together
Setting financial targets together is also a smart idea. This may be family financial goals, such as establishing a vacation fund or saving for a big purchase for all, or personal financial goals, such as saving for a toy or electronic device.
Setting savings targets can also serve as a springboard for talking about the difference between investing for a specific purpose and using your money for necessities like paying your mortgage and buying groceries. You may also like reading 5 Simple Tips for Creating A Family Budget.
4. Make It Visual
Having visual reminders of one’s finances may be beneficial to both children and adults. Adults normally handle their finances using spreadsheets, budgeting tools, or a notepad, so why not make anything for the whole family?
Budgeting worksheets or colouring pages may be drawn (or purchased) online. You can show them on the refrigerator for everyone to see. Then, when you get closer to your savings targets, paint them in.
If you’re going on a Disney holiday, for example, you can make a colouring page to represent how much money you’ll need to save for park tickets. Your kid will be entertained as they assist in the colouring of the worksheet, taking them one step closer to their dream holiday.
5. Make Budget Experiential
If your children, are book smart, one of the best ways for them to learn is by experience. Make budgeting experiences out of commonplace events.
When my kid was younger, the idea of taking them to the grocery store was terrifying. Our youngest was (and continues to be) the best at wearing us down so he could buy something.
Taking your kid shopping, on the other hand, is a great way for them to see how the family’s budget works. Give them a budget and let them shop for weeks’ worth of meals. Allow them to compare prices before determining what you require and what you do not.
Other activities include going to the bank, playing Monopoly, and purchasing a piggy bank. Don’t just discuss money with your kids. Enable them to participate in situations in which they must make financial decisions.
6. Open Up Savings Account For Your Kids
What better way to teach your kids about money management than to open a savings account for them? Many banks provide custodial accounts, which allow your child to have restricted access to the account while you supervise it.
Children’s savings accounts have a wealth of learning experiences, such as saving for a specific target, learning about compound interest, depositing and withdrawing money from a bank, and much more.
7. Instil The Concept Of Giving
Giving to others is another financial lesson you can teach your kid. Discuss with them the possibility of putting aside a portion of their earnings to help those in need.
This may include paying tithes to the local church, donating to a local charity etc. Money donations benefit those in need, but there is also a sense of fulfilment that comes from assisting others. Giving allows them to see a bigger picture of the universe.