10 Frugal Habits To Teach Your Kids While They’re Still Young
Teaching children about money management from a young age is invaluable — it’s a life skill every money expert agrees is important.
“Your child is picking up your money habits whether you teach them or not, so you must be intentional about your habits before teaching others,” said Kelly Palmer, CFA, charterholder and founder of The Wealthy Parent. “Whether they silently observe as you shop for their macaroni and cheese on sale or take note when you walk to the back of the store for a good deal, children are the ultimate observers.”
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According to Dana Ronald, CEO of Tax Crisis Institute, the key to building strong financial habits is to start with the basics. “Teach your kids about budgeting, saving and spending wisely from a young age.” He noted that this will set the foundation for their financial future and help them avoid falling into debt traps.
Here are some frugal habits parents can instill in their children.
Teach Them To Talk About Money
“I recommend starting simply by having open conversations about money,” said Palmer. “No matter your child’s age, it’s never too early to start discussing money.”
She suggested starting simple, even when they are a baby, by narrating your inner financial dialogue during a shopping trip, and then gradually increasing the depth of your conversations as the child gets older.
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Teach Them To Manage Expenses
“As your child gets a little older, I would introduce the concept of income and expenses,” Palmer continued. “Whether they earn income from chores or other projects, you can then start to teach them how they can use this income.”
She said to teach them early that it’s important to keep their income higher than their expenses.
“When you discuss expenses, I encourage you to find a fun way to communicate the value of certain items,” Palmer explained. “If, for example, your child wants to buy a new toy, you can ask them if that toy is worth 10 days of chores. You could also ask if the toy is worth 5 boxes of macaroni and cheese. Making each expense tangible will help teach the value of certain items.”
Instill the Value of Resourcefulness
Palmer highlighted that it’s essential to also instill the frugal habit of resourcefulness in young children. “Encourage your child to use creativity and repurpose items instead of always buying new things,” she advised. “Whether it’s for a school project or a holiday gift, consider how you both can be resourceful.”
Additionally, she recommended encouraging a child to save resources, energy and ultimately money by doing simple household tasks like turning off faucets while brushing teeth and turning off lights when they leave a room.
Teach Them How To Budget
Teaching your children to budget their money can help them understand how to manage their money better, said Paige Robinson, real estate investor and owner of House Buyers. “Introduce money management concepts that include setting and tracking budget goals for items such as food, entertainment and sports activities.”
Teach Them Money Can Be Fun
“Learning about finances can be boring for kids, so make it fun and engaging!” said Ronald. He recommended using games, apps or even role-playing activities to teach them about money management. “By making it interactive, they are more likely to absorb and remember the lessons in the long run.”
Andrew Pickett, lead trial attorney and founder at Andrew Pickett Law, similarly recommended making it fun by turning it into a game or challenge. For example, having your child help you find the best deals on groceries or letting them budget and plan for a family outing can keep it from becoming dull.
Encourage Saving and Investing
According to experts, it’s equally important to teach your kids the importance of saving money for both short-term and long-term goals. “This could be as simple as setting up a piggy bank or a savings account for them,” said Ronald. “By encouraging saving, [you’ll teach them] to delay gratification and understand the value of money.”
Robinson also urges parents to stress the importance of saving and investing for the future. “If budgeting is teaching your children to spend thoughtfully, saving and investing can ensure that their money is put to good use.”
She said a good start in teaching children about saving and investing is to have them open their own savings account. “This will give them the opportunity to watch their money grow over time and will help them understand the importance of investing.”
Help Them Learn To Make Financial Decisions
As your children age, Pickett recommended you involve them in discussions about household finances and major purchases. “This will help them understand the value of money and the importance of making informed decisions.”
Teach Delayed Gratification
“We often want things instantly in today’s society,” Pickett noted. However, he explained that teaching your children to delay gratification and save for something they really want will help them develop patience and discipline.
Show Them the Value of Second-Hand Items
Thrift stores, garage sales and online marketplaces are great places to find gently used items at a fraction of the cost, said Pickett. He noted it’s important to teach your kids that buying something that isn’t brand new nor expensive is okay.
Encourage Entrepreneurship
“Kids can learn about earning money by starting a small business,” Pickett added, “selling handmade crafts or offering services like pet sitting or lawn mowing. This will teach them valuable skills such as budgeting and customer service.”
Ronald also urges parents to show kids the value of getting creative with making money. “Encourage them to start their own small business, such as mowing lawns or pet sitting,” he explained, noting that this will teach them both the value of hard work and also instill an entrepreneurial mindset.
Lead by Example
“Remember, kids learn by observation and imitation,” Ronald emphasized. “Set a good example by practicing frugal habits yourself.” He said this could be as simple as avoiding unnecessary purchases or sticking to a budget. “Your actions will speak louder than words, and your kids will likely follow suit.”
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This article originally appeared on GOBankingRates.com: 10 Frugal Habits To Teach Your Kids While They’re Still Young
