Why is it important to teach our children to budget?
It will be a necessity as a child grows to understand the difference between a NEED and a WANT.
A need is something we cannot live without.
A need is food and clothing.
A want is something we can live without.
A want is things that we perhaps do to relax such as spending money on websites such as 888sportsusa.
It is ok for a child to understanding that it is ok to buy things that are a want but that needs must have priority in spending.
Children are not born with an understand of what we need vs want or what a budget is.
We have to take to teach them properly about money.
Play money games at an early age.
There are many toy store sets with play money or small denomination of change work just as well.
If you chose to use real money in teaching your children have them save it in a safe place between play to understand that it is something special and worth not losing.
A piggy bank or ornamental box is a good place for any change.
Buying and selling toys or cookies for play helps the child establish a stronghold on the understanding of what we have to use money for in everyday life.
Have the child do chores or help older ones to establish a bank of there own money for things that they want to spend money on.
Some parents will give the allocated money for toys to the child and allow them to spend it either all in one sitting or in multiple times through a set time frame.
By not adding to the child’s money for there toys the child will learn what the family had budgeted towards their toys.
A trick my mother started at an early age was giving each of us a part of the shopping list and then showing us the proper way to tackle it.
Only after those needs are met can the wants be thought of.
She showed us how to look at sales, the cost per oz of an item, and name brand vs off brand.
The height of an item or location such as an endcap can have a large bearing on the cost of an item.
Teaching your children to budget will help them to look at you with more respect when you say that something is not a priority, despite how much they “want” it.