By As your kids get older, adjust your approach to teaching them about money.
As hard as it is to believe, the first day of school is less than a month away in Fayette County. Although we want you all to fully enjoy the remaining weeks of summer, I would encourage you parents out there to take a little time and think about your strategy regarding your kids and money. Especially as the little ones get older, it might to be time adjust a few things and get them more involved and thinking about how money works.
I know shopping with kids can be challenging, and it’s tempting to knock out the school supply shopping while they’re at day camp or visiting your parents. But, especially for slightly older kids, buying school supplies can be a great way to teach them about comparison shopping. As you’re picking out pencils, paper, notebooks, etc., take the time to show your kids the prices on each item, and to pick the ones that not only fit your needs, but your budget as well. If you have any coupons, take them with you. Teaching your children how to spot a good deal now can set them up to be savvy consumers in the future – and feel the satisfaction of finding a steal. This strategy also helps kids feel involved in the process of buying clothes and supplies.
If you’re not already giving your kids an allowance or compensating them for the chores they’re responsible for, the start of a new school year might be a great time to revisit this topic. As kids grow up, allowances can be adjusted and increased as each child becomes involved in more activities or shows interest in new hobbies. Earning their own money for house duties helps teach kids to save and spend intentionally. Creating a schedule of assigned chores drives home the concept of work and reward – and the value of working for their money instead of simply asking for it. Each family will have a different philosophy when it comes to kids and allowances, but finding a system that works for you can help your kids grow up to be smart with their budgets.
Many school activities like band and sports often start rehearsals in the weeks leading up to the first day of school. If your kids are involved in something like band that requires either renting or buying an instrument, or a sport that requires new cleats, help them set up a budget that includes helping out with these costs. They can start to appreciate how long it takes to save for goals, and feel a sense of ownership in their chosen activities. If your budding NBA player wants the hot new sneaker that costs twice as much as the off-brand pair, offer to pay the amount of basic pair and have them cover the rest. Then they’ll be able to decide for themselves if the extra cost for a status symbol was worth it. If your kids are being especially resistant – or indifferent – to talking about money, why not go ahead and bring up Christmas? Include gift-buying in the budget you’re helping them create – along with the added incentive of starting early on their own wish-lists.
You know your kids best, and what they’re capable of understanding at their respective ages. Find ways to be creative, get them involved, and keep adding more responsibility and advanced concepts as they get older and grasp new ideas. Whether kindergartners or high school seniors, money is an important topic for parents to address.
As you talk to your kids about money and finances, we’d love to hear what’s worked for you (or what hasn’t!). Let’s swap stories.
Article by David Smyth, CLTC, Senior Partner at Family Financial Partners — a financial services firm in Lexington, Kentucky.