Teaching kids about the penny-pinching wonders of living frugally can be easy and even fun when you take the right approach. Here are five basic steps to getting your kids on the frugal bandwagon:
Talk About the Family Finances
Don’t shy away from having frank discussions about money and how you balance the family chequebook. Talk about bills, credit cards, car payments, your food budget, and anything else that factors into how money is spent to keep your household running.
Needs vs. Wants
Helping your kids understand the difference between what they need and what they want is one of the first steps towards successfully passing on lessons in frugality. Lay it out in a simple chart that uses examples which relate to their experience. In the needs column add things like water, healthy food, a home, toilet paper, clothing, and so on. In the wants column add things like trendy shoes or an expensive toy. When kids learn to identify what they need as opposed to what they want, they’ll have the foundation to understand why certain expenses take priority.
Money Is Earned
Establish the concept of earning money as a part of the workings of your household. Instead of giving out an allowance, assign chores to your children and pay them for a job well done. To avoid complication and to ensure everyone has an equal opportunity to earn money, don’t assign monetary value to each chore. Instead, give them a “wage” for completing their assigned tasks. You can use this system as a jumping off point for explaining where your own income comes from and how you earn it.
Talk to your kids about the value of money. Take them shopping and give them a certain amount of spending money. Introduce them to the idea of looking at price tags and working with a budget. Explain that with the money you’ve given them they have the choice of getting a few cheaper items or one expensive item. At this point they’ll be faced with deciding which items are the most valuable to them.
Be a Good Example
It is universally known that kids are little sponges. They soak up everything they see, including how you spend your money. If you want your kids to be frugal, it’s time to practice what you preach. Share the thought process you put into each purchase. Did you shop around? Did you clip coupons or research deal codes online? Did you scavenge the local thrift shop? Take your kids with you on shopping excursions and make them a part of the process. Modelling the behaviour you want to pass on requires minimal effort on your part, but it will heed the best results.
Use these steps to plant the seeds of frugality in your kids’ minds. Hopefully they’ll take these lessons to heart, and use them to build a better future for themselves.