From costly gadgets and toys to smartphones and sports gear, the list of financial stumbling blocks seems endless for most parents. Even if you can afford expensive presents, you should still teach your kids to be smart money-wise so that they would grow into independent, finance-savvy adults. Here are a few simple ways to teach your kids the basics of frugal living.
1. Experiences more than material assets
All children crave peer admiration, and they also copy the behavior of popular kids in pursuit of social acceptance. Still, the fact that your kid’s classmate has the latest iPhone does not mean that you should buy them the expensive gadget. Explain to your child that material things are cool, but that experiences such as traveling the world, meeting new people, and spending time with family are even cooler and have more lasting effects. Foster creativity and curiosity in your child, and teach them to appreciate small things in life rather than rely on expensive possessions for happiness. This way, you will be paving the road for their healthy attitude to money in adult years, and enabling them to find pleasure outside material wealth.
2. Differentiating between needs and wants
“But I really, really need it!” You have probably heard that one at some point, right? Explain to your child that needs and wants are different concepts, and that not every toy they like a lot is a must-have. However difficult, try to make it clear to your child that money should be used to cover the basic needs first, such as housing, clothes, and food, and that needs and luxury differ greatly. Tell your child that it takes lots of time and effort to earn money, and that spending it carelessly will get the family into trouble with banks or require sacrifices in terms of everyday comfort.
3. Teach by setting a frugal model
Children learn by example, so show them how to handle money in real-life situations such as grocery shopping or vacation planning. When buying your child clothes, explain to them how much money you can spend and encourage them to browse cheap children clothing at online stores and consignment shops like https://www.swap.com. In this way, they will get a chance to pick apparel that they like without pushing you over the budget line. If they start complaining about how they never get to have what they need, return to point 2 on this list and repeat the drill.
4. DIY is fun – and it saves money, too
Every child likes praise, especially when they earn it doing the things adults do. Include your kid in DIY projects around the house: teach them how to wash a car, water or weed a garden, fix a broken pipe, and tackle similar chores. As you are showing them the repair-and-maintenance ropes, tell them that a little elbow grease can help save a lot of cash which can then be used for fun.
5. Make the lessons a game
The lessons that stick the longest are those that are fun to learn, so turn your finance talk into a game. For instance, challenge your kid to find the least expensive cereal or snack bar in the shop; prompt them to pick out a cool birthday party venue that fits the family bill; ask them to help decide on a holiday destination based on the available trip budget. Games involving money such as Monopoly and all-family bargain-hunting are a great way to promote your child’s critical thinking and teach them a few things about good deals and value of money.
It is never too early or too late to lay down healthy foundations for your child’s responsible attitude to finances. Practice what you preach, and never miss a chance to drop a cue about good deals and frugal budgeting, and your kid will soon be handling cash like a banker!
About the author
Amy Mia Goldsmith is an Aussie expat living in the UK and a newbie parenting blogger. Check out her blog Young Mom Of Two.