Sometimes parents are nervous about letting their kids in on the financial picture-but it might be one of the best decisions you make for you and your family. Kids already always know what’s going on, anyway, so you might as well ‘fess up in the money department. And you might be surprised what your kids come up with, to help the family out.
Save a little bit each month
One thing you and your kids can both start is to commit to saving at least a small amount of money each month. Do you give your kids an allowance? Then, you could start there. Depending on how old your kids are, you can have them divvy up their allowance into jars-mad money, saving towards a special purchase, savings to go into the bank, and so on-or if they’re old enough, actually tracking their spending and receipts in a log of some kind. Whatever you choose to do, long-term savings that your kids don’t touch should be part of the plan. A general guide is 10%.
Save together for something special
If you’re planning a family trip, save as a family. Have a jar or envelope where anyone can make a contribution at any time. When you or your kids contribute, mark your contribution on the envelope. Whoever contributes the most (make sure it’s proportionate now!) gets extra say on some outing, or gets to choose where you eat, or something else you can do as a family.
Keep it upfront to keep it going
Another trick is to keep the logbook, or the jars, in plain sight where the kids can check on them whenever they want. Don’t make money a dark secret to be squirreled away, hidden, or something to be ashamed of. Now that doesn’t mean they need to show your family management plan to the neighbors! But make money management as natural as making dinner, or doing homework-something you can talk about, discuss, and plan together. Then, take a page from your kids savings plan. Do the same thing for yourself.
Now you try
Write down what you spend each month, and on what. Reduce every expense that you can-like groceries, mad money, other discretionary spending-by 10 per cent. Sock that money away, just like your kids are doing. You might even have a competition with your kids. See who can find the best way to save. Have a tip jar where the loser has to put in $1.00 and the winner gets to take it out every week, or every month, whatever your finances can afford, and do whatever they want with the winnings. If you make saving money fun, your kids will be glad to do it. They’ll learn a really valuable lesson, too. And so will you.