Your kids want to use their free time in the summer having fun and you want them to learn important life skills, like budgeting. Fortunately, there are several activities that can make learning about managing money entertaining. Here are some for youngsters at different ages:
3–5 years old
Learning the difference between things she needs and things she wants is an important milestone in your young child’s financial education. It’s also one of the building blocks of budgeting.
One way to teach that lesson is to turn grocery shopping into a game. As you add items to your cart, challenge your child to categorize each one into “needs” and “wants” and say why she made those choices. Place the “needs” items in the front of the basket and the “wants” items in the back. That way, after putting through the “needs’’ items first, if you reach your budgeted amount at check out, she can watch as you choose to put some of the “wants” back, if you have any left. If you go under budget, you can reward her with a small “want” item for herself.
6–10 years old
The under-budget challenge
At this age, your child should be learning to make responsible choices about how to spend money, which also involves planning ahead. To accomplish this, you can involve your child in a shopping game.
First, have her use old shopping receipts and grocery store ads to help you make a shopping list that’s sorted by “wants” and “needs”. Write down how much each item on your list will cost and add it up. If the total exceeds your budget, have her help you cut back on the non-essential “wants.’’
While in the store, the objective is to get the items on your list without going over your budget. Your child can help you do the math and make choices — like choosing an alternative product that’s on sale item or is a generic version of the branded one on the list. As an incentive to stay under budget, consider letting her deposit the leftover money in a piggy bank for savings as a reward.
11–13 years old
Is there an item your preteen keeps bugging you to buy? The next time he asks you for it, you can help him set up a purchasing plan. For example, if he’s been eying the latest gaming console, help him research the cost and compare prices amongst different retailers. Set his next savings goal as the cost of the item, and then help him figure out how long it’ll take him to get there, considering his income from odd jobs, allowance and birthday money. Offer to match a certain percentage of what he saves as an incentive.
It’s important for your child to keep money in a safe place, so if your preteen doesn’t have a savings account, now is the time to upgrade from the piggy bank.
Cherise Fantus, NerdWallet