Spending: Set An Example

Kids have so much these days. It’s a balancing act to provide for needs but also allow for the wants in life.  How do you teach your children to be wise with money and grateful for what they have?  The surest answer I can give is by teaching them through your actions.  Saying "NO" can be the best thing you do for them sometimes. Thrifty spending and conservative purchases are great examples of being frugal but they also will need to learn it’s okay to splurge every now and then as long as the needs are taken care of.  There are specific techniques that I do with my son and most of the time it works well. 

1) Toys are rewards outside of celebrations like Christmas and Birthdays.  Using this technique will give confidence and build them up with praise for a job well done.  We work hard and get a paycheck at the end of a workweek.  It's the same philosophy.  Attaching the reward to an action implements working toward something.  I'm also an advocate for treating to something special; just keep it as something special and not the normal.

2) Give allowance for chores.  In my house, there are chores you do because you are a part of the family and then there are extra chores that are thought up to earn some cash.  This teaches that the regular life accomplishments don't always get praised but that there are natural consequences that are good for keeping a clean room, taking out the trash...etc. Extra chores are the added effort to earn toward something wanted and go above and beyond the regular.  This in my house is giving the tub and extra special scrub, organizing the books on the bookshelf, cleaning out the car, etc.  We negotiate a price for completing such task and once it is finished I get to gaze upon the face of a very proud child who knows he truly worked for that money.

3) Create incentive to save.  Consider a savings plan for your kids. Whatever you save, I'll match up to X dollar amount.  For example, my son really wants something that costs $300.  He is saving his money and once he reaches $150, then I'll match it and he'll obtain his accomplishment. It makes the task of saving feel less daunting while teaching him the general principal.

The main idea is to be an example.  If you are spending money without reason, your children might just follow in your footsteps.  Ask yourself, what do I spend my money on? Do I spend frivolously or is it well thought out? What spending habits are my children witnessing?  Do I share those thought steps with them?

You are your children’s best teacher.