Parents have a very big influence in the lives of their child. Their early years are spent looking up to what their parents are doing. In the eyes of a child, their father is a hero and their mother is a role model.
When it comes to personal finance, it is up to parents to teach their kids how to manage it properly. Regardless if you have been blameless in financial management or you are currently in debt, you are in a very influential position to ensure that your child will not have financial difficulties in the future.
Doughmain.com conducted a survey in 2012 that revealed how 81% of parents feel like it is their responsibility to teach their children about important financial concepts like saving or money management. In the same survey, it is revealed that 43% of parents review the household bank statements with their children.
There are other surveys that mention how high school students got their first financial lesson from their parents. Although personal finance lessons are becoming part of every school’s curriculum, it is important that children get the core lessons from their homes.
But what exactly should you be teaching your child?
5 tips to help make your child get used to frugality
Apart from the usual budgeting, saving and smart spending, we highly encourage parents to teach their kids about living a frugal lifestyle. Of course, this lesson can only be taught if the parents are willing to live the same lifestyle. But for those who are tired of the consumerist way of life, then you should start teaching your kids about frugality. If you are new to this lifestyle too, you can learn together with your kids.
There are many frugal living tips that you can find online but here are 5 ways that we suggest you can use to help your kids get used to a frugal lifestyle.
Encourage them to set saving goals.
If they show you a toy that they want to purchase or something similar, ask them to save up for it. This is one of the foundations of frugality because you are teaching your child the value of putting aside money for something that could be more important in the future. It is also a great stepping stone to teach them about wants and needs. If it is a need, they will be motivated to save up for it. As they reach one goal, encourage them to set up another one.
Shop at thrift stores.
Lead through example by shopping for clothes or any other product that you need. You do not have to buy everything new. Books for instance, are something that you can buy second hand. Make your child understand that it is not being cheap – it is being practical. What need do you have for a new shirt that costs you $50 when you can buy 5 shirts in a thrift store for the same amount of money? That makes a whole lot of sense.
Show them how to compare prices while grocery shopping.
The perfect area to teach them how to be smart bargain shoppers is in the grocery. This is where items from different brands are placed beside each other. Make sure you teach them that the lowest price is not necessarily the frugal way to buy – just like the most expensive product has the best quality. Teach them how to weigh the best product that you have to buy. It will make grocery shopping longer so make sure you schedule it properly. Let them make the decision and explain to them when they are right and wrong. Eventually, they will get used to buying this way. As a bonus lesson, make sure every grocery trip begins with a shopping list.
Get everyone in the family a library card.
This is another way to teach your kid to avail of free items whenever they can. You can check out books, DVDs and other entertainment activities. That will save you are lot of money and your kids will learn how to seek out what they can get for free. What is not spent can be saved or placed in more important expenses.
Let them manage their allowance.
One of the best ways to see if they are getting the important frugal lifestyle lessons you are teaching them is to let them manage their allowance. When they are old enough, give them a weekly allowance and tell them that they cannot get anymore until the next week comes. When they run out of money, do not give in to their request for additional allowance. That way, they will know that you are serious about the whole thing.
These are only some of the things that you can do to help teach your kid about living a frugal lifestyle. You can also teach them other things like when to buy a sale item and when to let it go. You can decide how you will teach your child and what methods will be more effective. After all, you know them best.
Of course, the best way to teach them about anything is really to just set a good example. Even if you talk to them for hours about financial management, if they cannot see it in you, they will not believe you. They will not implement what you are teaching them because they cannot see it in your life. In some cases, even if you do not talk to them about it but you practice it, that is what they will adapt as they grow older.
Reasons why you want your kid to be frugal
There are many reasons why you want your kids to live a frugal lifestyle. One of them is to avoid ending up as you did. A DenverPost.com article tells the story of one parent who takes time to teach his children how to be wise with money. The main reason why the father teaches his kids proper financial management is because he did not want his kids to end up in debt like he did when he was in college.
Beyond our need to protect our kids from the devastating effects of debt and other financial problems teach them how to live a frugal lifestyle will teach them the following lessons.
Living below their means. Frugality helps people learn how to live below their means. Nowadays, living within our means is no longer enough. It has to be below because you want to be able to save the extra money or invest it so it can grow.
Smart spending is not about buying only when you can afford. It is not buying even when you can afford it because you know that there is something more important for that money in the future.
Saving for the future. In connection to the previous lesson, frugality will teach your kids to put aside money for the future.
A frugal lifestyle has a lot of benefits that you may want to consider. It is not compulsory for your kids to learn – at least not in the same level as budgeting or saving. However, you will find that it will instill a lot of values in them that will really shape them to be great money managers in the future.