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Teaching Your Kids to Be Frugal – What, When, and How

By on December 6, 2018
Teaching Your Kids to Be Frugal

Learning how to manage money is an important life skill everyone needs. Everything from making changes to creating and setting a budget should be part of your child’s education and, if you really want them to succeed, you should start early. Here are some tips for teaching your kids to be frugal.

1. Teach Your Children to Work Hard

When your children are still young, they may not grasp the concept of money. They see you exchanging bills for goods at the grocery store or taking cash out of the ATM, but they may not understand what is really happening. To set the foundation for later, start early in teaching your children the value of hard work. If they learn to work hard and then you start introducing money as a reward for that hard work when they are old enough to understand, they’ll actually value the money they earn.

2. Encourage Your Children to Have Experience with Money

As your child starts to earn their own money, either through household chores or an after-school job, you should start teaching them how to use it properly. If your child wants something outside of their basic necessities, make them pay for it with their own money. If your child isn’t ready for this step, give them other experiences. For example, if they break something expensive, make them pay for part of it out of their allowance or the contents of their piggy bank.

3. Start Teaching Your Child How to Save

In addition to teaching your children the value of money as a means of buying what they want, you should also teach them the importance of saving. An important lesson to learn is that you might have to forego immediate gratification in exchange for a bigger reward later. For example, if your child wants to save up for a video game, you might have to help them avoid spending their money on smaller things like snacks or toys until they reach their savings goal.

4. Teach Simple Money-Saving Strategies

There are many ways you can save money in your daily life if you make a habit of it – teaching your child these things early on can help them be more frugal later in life. For example, order water instead of a soft drink when you go out to eat. It may only be a savings of $2 or $3 per person, but it adds up for the whole family! You can also teach your kids the value of comparison shopping to get the best price as well as choosing store brands over name brands for basic items.

5. Show Them the Difference Between Want and Need

When your child starts earning money of their own, they are probably going to want to spend it right away. An important lesson to teach is the difference between want and need. For example, your child might want a new toy, but he might need a new set of sneakers for school. Including your children in budgeting and buying decisions will help them learn.

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