> Teaching children how to make smart spending decisions
Teaching children how to make smart spending decisions
The first step in teaching children how to manage their money and spend wisely is to discuss with them the difference between needs and wants. They should learn to buy the things they need, such as clothing, before they buy the things they want, such as concert tickets.
Spending money is about making choices. Help your children understand that if they choose to spend their money on one item, they will not have it to spend on something else or to save for something in the future. For example, buying less expensive clothing that still meets their real needs will make their money stretch further.
Tips for teaching children to spend money wisely
Say no to impulse shopping. Teach your children to shop only when they need a specific item. Create a list ahead of time to avoid being tempted to buy things on impulse.
Shop around. Encourage your children to compare prices between products and stores and become an educated consumer.
If your children want a particular brand-name item that costs more than a similar item, ask what other purchases they are willing to give up to get it.
Make your money stretch further. Teach your children to shop smart and wait for sales to buy things they want, and not buy something just because it is on sale. This will help them get more for their money.
Know where your money is going. Your children can build their budgeting skills by tracking how they spend money. Have your children write down their spending on paper or use a computer program. Choose a method that will be easy for them.