Introducing Young Kids to Budgeting

Budgeting with KidsA few months ago while walking through the toy aisle of Target I realized just how much I am teaching my young children about money without even realizing it. The conversation was simple enough. “We don’t have all the dollars we need to buy that toy,” the four-year-old said. “That’s ok. We can still have fun at home without all the toys!” replied my two-year-old.

The first comment I cringed at because, as a SAHM with a teacher for a husband and three young children, I know the challenges of balancing a budget. It is stressful and challenging at times and a part of me doesn’t want my children to see that. At the same time, as my children have grown accustomed to looking at the toys without usually making a purchase, they strengthen a number of traits including patience and creativity, among others. What could be a hindrance is more of an opportunity I came to realize in my second son’s remark.

As they get older I can introduce them to responsible management of their money by assisting them to open a bank account, make money through jobs outside of the home, and understanding of larger wants and needs with long-term goals. Since that trip to Target in the spring I have taken a few steps to incorporate more purposeful attention to what my children understand about money.

First, we are more aware of how we talk about money. As any of us with young ones know, they are listening—and understanding what we say–even when we think they aren’t. Every conversation we have about money over dinner is an opportunity for them to learn. That might mean putting the conversation off until after they go to bed. I think it’s also good for the children to see hubby and I discussing and being on the same page about money. We want it to be commonplace to think about what something is worth, as well as how to define worth.

That said, we are becoming more aware of what our spending and paying says about our values at large. Are we spending extra money on too much fast food or treats? Do we take the time to donate to charity or otherwise share our small but real prosperity with others? When we talk to someone on the phone about medical bills, how do they hear us talking? What is our mood when we open bills? Are we tense and rash, or patient and thoughtful? Do we give when given the opportunity or always say no? This is not so much talking to them as much as talking in their midst.

I also try to figure out what they know and use real-world examples in the moment. Little kiddos don’t have the time, cognitive ability, or patience for long explanations or extensive understanding of budgets. However, in the store I can say, “Today we can’t get a treat because we’re saving our money for a meal out/gift/someone’s birthday. When given birthday money or a few quarters for whatever reason, we can discuss about what they want to spend it on or if they’d like to save it. This can be tied to a conversation about wants and needs, the regular flow of cash, or patience in saving for the sake of later reward… at a level of discussion related to your young child’s developmental ability.

Budgeting lessons don’t always have to be in the form of money. We spend our time, space, and emotions all day long, among other things. If we spend our time at the park now, we will have less time to spend with your friend later. The concepts are similar, and lessons of budgeting need not be confined only to money. With many things we can share, spend, or save.

I believe what we spend must be tied also to what we give. Whatever we say yes to means we say no to something else. For this reason I’ve begun incorporating the kids when I sift through our things to give away. I used to prefer doing this after they go to bed for the sake of ease. They won’t even notice it’s gone, I would think. Now I think it’s important that they notice something of theirs is gone. By providing them the choice to give away their toys, I’m also offering them the opportunity to build a giving heart.

Lynette Moran is a mom of three children from 3 months to age four. She has cloth diapered all three since birth and enjoys all things eco-friendly and mindful living.

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