Budgeting with kids
Spend less while teaching money lessons
School’s out and kids have high expectations for a memorable summer, but there are ways to stick to a budget while also teaching your children a thing or two about money.
Whether it’s a weekend road trip or an afternoon activity, Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, recommends involving children in the planning process – especially when it comes to the budget.
“All too often, money is a taboo topic at the kitchen table, but the sooner your kids start thinking about money in a responsible way, the sooner they’ll develop sound financial habits that well benefit them for their whole life,” says Schwartz. “You’ll help them understand the value of a dollar and it might take some pressure off of you at the same time.”
Consolidated Credit recommends the following steps to help plan your summer fun with the kids:
- Come up with a reasonable amount. Entertainment spending should take up about five per cent of a responsible monthly budget. If you’d like to spend more than 5 per cent, make adjustments elsewhere in your budget.
- Divvy it up. Once you’ve settled on an amount, sit your kids down with a calendar, pad of paper, laptop and a stack of Monopoly money. The first and best lesson you can teach your kids about budgeting is made clear when they see that the ‘ summer fun’ budget is a finite amount.
- Research activities and destinations and the costs associated with each. Then, suggest some freebies. Teach your children how to stretch their entertainment dollars by researching free, or almost free, summer activities like street festivals or trips to nearby beaches, lakes or swimming pools.
- Reward frugality. Has your child been bugging you for the latest toy or video game? Let them know that if they come under budget by doing some sound, inexpensive planning, they can take the leftovers to the mall.
“Besides saving money and teaching a few lessons, engaging your children in the budgetary process will also give them a sense of accomplishment and responsibility within the household,” Schwartz said.