Our children look to us as their first roles models so it is our job as their parents to lead by example. To simply say “don’t do what I do” is not enough, you will have more influence in a positive way if you share how you budget for your family. This will not only teach them to be responsible it will boost their self –esteem and self confidence.
Start by sitting down with them and have a talk about how much money you spend on the itemized necessities like clothes, shoes, food, gas, personal items and supplies.
Once you have shown them the amount of money going out you open a bank account for them and put that amount in the account for them every month. Teach the how to balance the account by keeping track of their spending.
Next explain to them that they will be responsible for using the money for their necessities. Mention that any money that is left over can be saved for future use on anything they want.
If they do not have a job increase their responsibilities and privileges or encourage them to find a job so they can add more money to their monthly balance that way, but remind them the purpose of the initial money, anything else goes into a savings account.
Once they get the hang of the process after about 4 – 6 months sit with them to go over their account and make adjustments to the budget as needed according to any changes that have happened since you both made the budget.
After doing this for a considerable amount of time “senior year” and they have started to make more money from their job, it’s time for you start to give them less money, and this will help them become financially independent.
It’s never too soon to start teaching them the value of money. Teach them how to write checks and that a check is the same as “cash.”
Tip: It's not wise to pay them to be responsible or for chores. This money will be spent regardless the difference is you’re making them responsible for it. The consequence for not doing chores should be the denial of privileges, like driving the car.
Tip: Inform your child that you will not extend credit if they spend all their money early. Doing this could encourage them to become accustomed to getting credit and we all know this may lead to bad credit card debt.
So let’s get to budgeting!