Knowing how to budget is a skill most adults wish they learned in school. Only some schools teach financial literacy, so more likely than not, it’s the parents’ responsibility to help their kids understand and manage money better.
Why should kids learn about money in the first place? Money management skills will help them feel more equipped to navigate through life as they get older and start bringing in a solid income.
Plus, it’s best to make all your money mistakes when you’re young. Imagine how your financial situation would look if you saved 10% or more of your first paycheck, started contributing to retirement at 18 years old, and were able to avoid lots of student loan debt.
Knowing how to budget can help your kids achieve this. Check out these fun ways to teach your kids about budgeting.
1. Have Them Budget With Their Allowance
I didn’t always give my child an allowance. I changed my mind after realizing he may not truly understand how to manage money if he never has any in his possession.
My son is too young to get a job so paying him an allowance for tasks completed around the house is a great way to teach him about money.
Set your own rules when you give your kids allowance. In my household, allowance isn’t guaranteed if no work has been done. We divide the earnings up into 3 main categories: save, spend, give.
This can teach kids there are different categories or purposes for the money they receive. If they want to buy something with their spend money but don’t have enough, they can hold onto it and save up over time.
They can also decide what to do with the money in each category and budget with it to fit their needs and wants.
2. Read a Book
Just ask your child what he or she wants to learn about money and look for a book together that will help teach the concept in a fun way. Some books even provide hands-on activities or discussion prompts so it can be an interactive learning experience.
There are so many great books for kids out there about money. Just check Amazon. Books like Lily Learns About Wants and Needs along with Shanti Saves Her Own Money are great books to help teach your kids about budgeting.
3. Go Grocery Shopping
This is one of my favorite ways to teach kids about budgeting. Everyone needs to go grocery shopping and you should already have a budget in place.
So, why not involve your child in that process and allow them to help you shop for groceries while sticking to the budget? Of course, you’ll need to have the patience to carry out this activity since it could take you twice as long to shop.
Still, it will be a memorable budgeting experience with your child. You don’t have to do a massive shopping trip either. Just shop for one week or a single dinner one night.
Discuss prices and serving size with them as you go through the store. Bring cash to pay with so your child can help you count out the money. If you don’t have enough, simply explain how you need to put something back or make a replacement so that you don’t exceed the budgeted amount.
4. Play a Game
There are so many fun games that will help you teach your kids about money. Monopoly is a classic game that you can play to discuss concepts like buying property, paying taxes, and having a positive cash flow.
The Game of Life is one of my favorites because it shows you how unexpected life can be along with how to act your wage so you keep your spending under control.
I also like how this game incorporates insurance. You have the opportunity to get insurance early on in the game.
If you stop at a space on the board where an unexpected incident happens like getting injured on a vacation, you have to pay some ridiculous amount of money if you’re not insured. This is quite similar to real life so it’s interesting to see how kids react to this along with the other decisions made in the game.
Other games you can try include Cashflow, Allowance, Name That Coin, Financial Peace Jr., and Payday.
5. Visit a Yard Sale
Who doesn’t love yard sale prices? Visit a yard sale one weekend with $20 or $30 and ask your kids to help you budget the money.
Think about one or two things you’re looking for and explain how much you’re expecting to spend. Encourage them to help you come out under budget.
If you spend less than you have, explain how you can save the leftover money or even take theme out for ice cream after shopping.
6. Have Kids Help Plan Their Own Birthday Party
Planning a birthday party for your kids can be exciting, but costs can also add up pretty quickly. You can turn the planning process into a fun way to teach your kids about budgeting.
Decide what your budget is and include them in the process of discussing where the party will take place, the entertainment options, what type of food will be served, and so on.
This is a great way to show kids how much things cost especially when hosting an event. You can even break it down and put your child in charge of one area of party planning like the food or decorations.
Show them how to research, compare options, take advantage of savings, and splurge a little on the things that are important to them. Ultimately, you’ll teach them that they can still have fun even if they have a budget.
Teaching kids about money can be a fun experience. They tend to have really good questions, and it’s so rewarding to see them grasp important financial literacy concepts.
It’s crucial that you take the time to teach your kids about budgeting. This will help them learn and practice using the skills they need to thrive as an adult and make wise financial decisions.
What’s your favorite fun way to teach your kids about budgeting?