Kids and Budgets

Posted on April 16 2008

Kids and budgets, now there are two words that don’t seem to go together. I always would say if I had any cash on me the kids could smell it and I would hear: Mom I need… and it seemed they would know just how much I had. Ok, I am probably stretching that a bit but anyone with kids, especially teenagers, probably can relate.

Getting a bit more serious, it is very important to teach our children the art of budgeting. As parents, our children look up to us and learn from us. They watch us and take in everything that we do, even our bad habits. As a parent I have had a hard time telling my kids no – I would love to be able to give them everything. In reality I needed to teach them the importance of budgeting, money managing and patience. We have turned into an instant gratification people. We see something, we want it, we buy it right now by using our credit cards and the thought we will pay for it tomorrow. While our kids are growing up, if we buy them the things they want right now as items come out on the market, we are training them that this is the way life is. Once our children grow up and go to college or start out in the world they have the same “need it right now” expectation, which can potentially rack up a lot of debt in a very short time if followed.

My first real experience with teaching budgeting was when my oldest (she was in junior high) started wanting the brand name items (shoes, jeans etc.) – items outside of our normal budget. What I also noticed was sometimes when she got these items they would only be worn or used a few times and discarded as the next up and coming trend would start. My daughter received a monthly allowance, so I started saying I will pay half and she needed to pay half. When she had to invest some of her hard earned money, her requests were on a more limited basis. All of a sudden some items were not as important as they were before and the items actually purchased were used more. We also started noticing, by having to wait for some items, trends would change and in some cases prices would go down. We also worked very hard on putting at least half of her money she received in savings.

Last but not least, before she started college, we discussed debt, budgets and credit cards. So many kids get to college and are immediately wooed by the credit card companies so it is very important that they understand debt. The best thing we can do as a parent is to give our children the tools they need to start off life on the right foot.