How to Teach Your Kids to Be Frugal
As a parent, you offer many lessons that have a lasting impact on your children’s lives. From teaching them to look both ways before crossing a street or how to stand up to bullies, you become their go-to guide for practical information as they grow. One of the most important lessons you can teach your children in today’s economy is how to spend money wisely. Teach your kids to be frugal by helping them learn the value of money, being a good role model, and finding ways to make saving fun.
Teaching Kids the Value of Money
Teach children age-appropriate lessons.How you teach your child about money should change as they age. Smaller children understand concepts differently than older children do, and this is no different when it comes to money. If you start young, however, you will be able to slowly introduce your child to managing money in a way that is easy for them to understand.
- Younger children ages 1-4 can learn how to use a piggy bank. Help them place money that you give them into the bank. When the child has enough money, show them that they can use the money to make a purchase.
- Children ages 3-5 can help you clip coupons and give them to the cashier. They also enjoy pretend shopping and playing store. Help your child set up a "store" in your home, then let them "shop" there.
- Older children are ready to earn their money by doing chores.
Make your kids earn money by completing chores.All kids want an allowance, but in order to teach your children the true value of money, you may want to make them work for it. You can create a basic weekly allowance depending on good behavior and chore completion at an amount that is comfortable for you. Then, create a chart that lists out how much they can earn for doing additional chores, such as washing the car, babysitting younger siblings, or helping with breakfast.
Give your children opportunities to shop and compare prices.Depending on your children’s ages and knowledge levels, you can start teaching them to be frugal shoppers early on in life. You can do this when you are buying groceries and household necessities for the family, or you can supervise your kids when they spend their own allowance of gift money.
- Take them to the store and quiz them on different items based on price, quality, and size. For example, you might show them the price of a 4-pack of toilet paper and then examine the 24-pack. Calculate the amount of savings they can enjoy buy purchasing items in bulk.
Require that kids develop a savings plan for pricey items.If your children are in elementary school or older, you can teach them the value of saving by opening accounts in their names. You might deposit small sums into the account as you see fit, but also make sure your child is making deposits as well.
- For instance, if your son keeps begging you about purchasing a new gaming system, have him research the price of the system with tax included. Sit down and take a look at how much money he has in his savings account. Then, calculate how much he will have to save and for how long to have enough to make the purchase.
- Your kids can do odd jobs around the house like taking out the dog or making their bed to earn small sums of money to put into savings. Kids can also use a portion of their weekly allowance to go to savings.
Modeling Frugal Practices
Teach children how money is acquired.Young children do not yet understand that money is earned and then spent or saved. If you don't teach them that they can earn money, then they may develop a perception of scarcity. This is especially true if you focus on frugality and saving without first showing them that the money can be replenished.
- Discuss how you earn your money and help them brainstorm creative ways in which they can earn some. For example, talk to them about running a lemonade stand or selling handmade friendship bracelets.
- Teach your children that, while they should respect money, they still have the power to gain more if they choose to put forth the effort.
Create and stick to a household budget.If you have not already developed a household budget, you can use such an exercise to teach your children lessons on frugality. Take an afternoon when you don’t have plans and sit down at the kitchen table with your bills and expense documents handy. Children often struggle to comprehend the true costs of living because no one has told them that someone is paying for them to live in their home or that the food that appears in their refrigerator each week has been purchased.
- Tally up the total cost of the necessities first: housing, transportation, utilities, groceries, supplies, childcare and insurance. Then, include additional budget items such as clothing, travel, or entertainment. Show your children how much you require each month to cover all expenses. Then, each month, you might go back and produce receipts of all money spent that month to make sure you are on the right track.
- Show your child how they can track their own expenses so that they can see how things add up.
- When money gets tight talk with your family about what you can sacrifice in order to stay within the budget. For example, during a strained month, you may have to eat mostly all dinners at home or skip the usual weekend cinema trip.
Don’t spend frivolously on yourself.It’s hard to help your kids develop frugal living skills if they see you being careless with your own spending. If you truly want to teach your kids how to be strict with their finances, you need to be a good role model. This means skipping the overpriced lattes, new sports car, or weekly mani-pedis.
- Being a frugal role model also translates to smart spending. Some people believe as long as they purchased an item at a discounted price, then they are practicing frugality. However, if you are buying something that is excessive or that you don’t actually need simply because it’s on sale, you are being frivolous, not frugal.
Minimize household waste.Being a positive example of frugal living requires being strict about household consumption. Food, personal care products, and even energy must be monitored to ensure you are not wasting money. What classifies as waste may look differently between households. In general, this may mean being more energy efficient with electrical appliances and usage, eating leftovers, or using old food as compost.
- Explaining why you need to cut down on spending can be hard. So, find a way to add incentive to minimizing waste. For instance, you might say, "If we are careful with out electricity use this month and remember to turn off lights in vacant rooms, we may have extra money to go on a special outing. Can you kids help me make sure we are using electricity wisely?"
Making Frugality Fun
Find cheap sources of entertainment.Who says saving money has to be boring? Show your children how interesting a frugal lifestyle can be with a bit of cleverness. Learn how to make do with less as a family.Make your family mantra "the best things in life are free."
- Cancel your cable or satellite subscription and get acquainted with Netflix or Hulu. Find out all the wonderful amenities available at your local library. Get inventive and swap out weekend cinema visits to outdoor movie theatre in lawn chairs on the backyard. There are tons of ways to have fun while spending little or no money.
- Focus on spending time together as a family.
- Learn to enjoy spending time outdoors. Nature can be a great source of entertainment if you engage in hiking, picnicking, or just playing in the park.
Play a game at home.Another exciting way to pass along your frugality gene is by creating challenges in your household that allow everyone to join in on money-saving. Find out who can use the least electricity. Choose one day each month to unplug your internet, turn off the lights in your house and go outside for family fun day.
Come up with silly meals using what’s in the fridge.Leftovers don’t have to be the bane of your family’s existence. Select one day each week to heat up foods that you already have rather than cooking an entirely new meal. Let your kids go crazy in the kitchen, choosing whatever they can find (that’s wholesome and healthy, of course) to create a meal.
Go thrifting.Are you in the market for a new bookshelf or sofa? Or, maybe your kids need some new outfits for summer. You can find good quality, durable items at thrift stores, flea markets, and consignment shops in your area. Visiting second-hand shops opens your children’s eyes to the multitude of goods that are available at low prices simply because they have been gently used by others.
- Plus, when you make purchases at thrift stores, you can put the excess money you save towards something else.
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