It’s that time of year again when gorgeous foliage, a gentle chill in the air, and sweaters and scarves all contribute to that cozy fall feeling and Halloween also sets the tone for enjoying the cool days of Fall. Some families, however, spend an enormous amount of money to decorate their homes, carve pumpkins, shop for costumes, and even dress up their pets. In fact, according to the National Retail Federation, the per-person spending in preparation for the Halloween festivities is expected to average $102.74. That’s why this is also a good time of year to re-assess our spending plan and also teach our children all about savvy money tips and strategies.
Teaching children about money is an essential skill – just like reading and writing. Although it’s important to consider the age of your child, there are several generic recommendations to teach our children how to manage money. Try the following steps:
Set up and Create:
Step 1. Parents, master the skills of money management by creating a spending plan. This spending plan will also help you learn to conserve your income by using knowledgeable spending.
For Your Kids: Set up monthly or weekly pay for your child by having them do small jobs around the house that they can earn money for. Don’t forget to explain how putting forth effort in a job setting earns you money.
Step 2. Parents, determine your net income, or what is left after deductions have been made from your wages or paycheck. Your net income is the amount of money you control to purchase your needs and wants. Your net income will also allow you to determine the amount of money to save.
For Your Kids: allow your child to decorate 3 jars or cans and write the words Save, Spend, and Give on them. Explain the process of dividing their money into cans by percentages:
- 40% would go into the Save jar,
- 40% on Spend, and
- 20% on Donate or Give.
(For example, if you received $20, 40% is $8, which would go in the Save jar, $8 would go in the Spend jar, and 20%, which is $4, would go in your Donate jar (8 + 8 + 4 = 20)
Step 3. Parents, in order to create your spending plan, you first need to know what you are buying and paying for. One way to accomplish this is by tracking your expenses using a phone application, a notebook, your bank statements, or a money management calendar. Be sure and record your purchases every day for a month.
For Your Kids: Explain to your children that a budget helps us make sure we have enough money to pay for the things we need using the Save, Spend and Give jars they will decorate.
Step 4. Parents, now that you have calculated your income, be sure and total your fixed (ex: rent, insurance, utilities) and flexible expenses (costs that are easily changed, reduced, or eliminated, for example entertainment and clothing).
For Your Kids: Guide your children to save for special events, parties, or emergencies.
Step 5. Parents, determine if you are living on what you make (total expenses do not exceed total net income) or if you are spending more than you make (total expenses exceed total net income).
For Your Kids: help your child start their own business! You could have a little entrepreneur on your hands if you feed this part of their desire to learn about money. They can start by cleaning cars, picking up trash, pulling weeds, and so on.
Step 6: Stick to your plan, but also review all of your expenses, and make necessary adjustments. Ask yourself the following questions: Is this really how you want to spend your money? How much is maintenance costing on your car? How much is the auto insurance? Could you save money by doing more cooking at home instead of eating out? Do you really need to buy gifts for all those relatives? Could you take a part-time job to supplement your income?
For more money-saving tips for kids, check out:
For adult classes on how to create a spending plan check out https://FRMParks.eventbrite.com: