Family Money Management and Your Kids
Family money management is a central part of teaching kids and teens about money. Much of what kids learn in life lessons they get from watching others – especially what goes on in their own house. Having a good home money environment is another example of where this is especially true.
What are integral parts of family money management that can really help your kids grow in their own understanding of money?
Everyone in the house needs to understand that money is a just a tool. This applies to parents and kids. Money can become an emotional subject very quickly, so keeping any money discussions neutral is a key to moving forward. Here are some ways to get started.
- Try to view and talk about money in a neutral way. Money itself is not “good” or “bad” and creating ways to help kids understand that is important. The more they can think of money as a tool at a younger age, the easier it will be for them to learn key concepts like budgeting and saving.
- Create a family budget. Make it a team effort, involving the kids as much as possible depending on their ages and money knowledge. Creating a team approach can help everyone feel like they are working together. It is a way for parents to help show kids that there are many things that have to be paid that they don’t know about. It can also help kids understand that there really may not be enough money to buy them everything they want.
- Make a family spending plan. This sounds a lot like a budget – and they can be the same thing. But you could also have a family spending plan that just focuses on the spending part so that kids can see how everyday decisions on spending get made.
- Set family saving goals. This could be for your next family vacation or just a day at the local amusement park. Starting with a fun goal can be motivating for everyone.
- Create a family bank that everyone contributes to. This can be the bank that holds the savings that you set with your family savings goal. Come up with a list of ideas on how you can find money in the budget or spending plan to add to the family bank each day or each week.
- Track your progress on your family money management goals – whether saving or spending – together. Teaching the kids to not only make a plan but then also to review how the family budget is working is a great way to get them educated for when they will make their own budget. If you can make it work, have different family members be responsible for tracking different things. You may have your 5-year-old count the week’s savings in the family bank while your 12-year-old charts progress on the grocery budget for the month.
- Celebrate money successes as a family. Achieving goals, such as meeting your family savings goal for the week, is important. Recognizing this and everyone’s part in making it happen can help make the next goal seem even more doable. It keeps everyone motivated and shows what your family can accomplish.
Family money management is a great tool for teaching kids about money in a way that gets them involved without having it be just about their money. It can create a safer way for them to learn because they feel like they are not alone – they are part of a team. You may find them volunteering to take on more family money responsibilities or even doing a budget for themselves.