Positive money management habits can be taught in the course of family life. Care must be taken to talk through the decisions and share the areas of weakness each parent possesses while developing good habits in the kids. Follow these ten tips to show children how to shop with prudence.
1. Living example
Shopping can be a great learning experience when the parent possesses the habits that will positively shape the child. More is learned from the actions observed than any number of words spoken. When attempting to teach children how to make good purchasing decisions, the parent must be aware of their own approach to shopping. Quick decisions can also be very expensive decisions, so care must be practiced if the children are accompanying the parent.
2. Family goals
Instead of constantly straining against requests for every new item in sight, teach the children why money is budgeted to limit monthly spending. When goals have been set so that the family can afford a summer vacation, the child can be reminded of the goal and asked if they still support the goal. Battles over money will diminish when the entire family is saving to reach a goal.
3. Decision making
When a choice must be made between two items, involve the child in the decision making process. Teach the difference between national brands and store brands and ask the child to choose the best value. Walk away from items that must be considered prior to purchase. Walk out of a store empty-handed to teach each child that buying is not the only choice.
4. Financial responsibility
One of the most effective ways to teach a child the cost of eating at school or taking a lunch is to provide a certain amount of money for the entire month and then let them choose. Allot enough for some school meals and then the rest must be used for home lunches. The money must be used effectively to teach them to manage funds between paychecks. Allow them the ability to make mistakes and maybe have to go a day without lunch at the end of the month to learn the lesson.
5. Earning money
When extraneous purchases are requested ask the child to do extra chores and pay age-appropriate wages. The reason to use this method is to teach the child the value of a dollar. If the chore is to do the dishes and the child is ten years old, twenty dollars is not really a fair wage for the parent to pay. Find the balance between paying for extra chores and involving the children in household maintenance activities.
6. Vacations and purchases
Family vacations are a great time of fun and togetherness, and one of the best ways to involve everyone is to allow the kids to plan some of the activities. The internet is a great resource of planning activities and staying within the budget. Another way to use those developing computer skills is to allow the kids to research brands and models of cars, appliances, and electronics prior to purchase. Use their information and teach them to present their ideas to the entire family.
7. Working together
All the children can participate in research and planning projects and they should be encouraged to help one another and give credit to each other. Learning should not be stifled by sibling rivalry. Every personís opinion is valuable and should be considered in managing the family budget.
8. Cost of credit
When the kids want to borrow money, the opportunity to teach them about the cost of credit has presented itself. Charge them interest on the money they borrow and teach them how expensive credit cards can be. When a credit card is used for a real purchase, teach the children what the statement looks like and what it will cost the family if the bill is not paid in full each month.
9. Realistic expenses
Some children are responsible enough to manage the money they need for some of their monthly expenses. If lunch money has been mastered, other expenses to teach them to manage include clothing, gasoline, and car insurance. Older teens are capable of understanding larger sums of money and should be taught this level of responsibility prior to leaving for college.
10. Financial difficulty
One area of caution should be when the family is encountering financial problems that must be handled by the adults. Children will not sleep at night when they know a bill remains unpaid. Teaching them about money is one activity that can be fun and beneficial, but their young minds cannot separate graduated levels of financial strain and they will perceive danger where none exists.