(For example, as kids excel in a sport, music, art, or other club, the fees also go up.) Take time to talk about how much things they need (or want) cost and whether there’s a budget for it. When children become teenagers, you often need to adjust your budget based on their expenses. Adapt your budget as their world changes.For example, when you take children to the grocery store, have them help find things on the shopping list, rather than going to buy things they just want (or impulse purchases). Show how a budget works in the real world.For example, have kids compare the cost of a summer pass to our local water park with the daily rate cost. (Some families include school lunches as part of the weekly allowance.) It also can grow as they get older and as they become more responsible with money. How much you give depends on your income and also how you expect your child to use their allowance. Give kids an allowance, if you’re able.Then you can have enough for something bigger later. Kids can begin to learn that if you want to do something bigger, you have to skip something fun one week. Divide the “fun” budget into a weekly budget.It’s a way to share power with them so that they become more responsible. Let kids begin to make some decisions about how they want to spend their own allowance, gift money, or some small part of the family’s budget.(Telling nickels and quarters apart is harder.) Children can begin to understand that pennies are brown, and quarters are the biggest and worth the most. It sets the stage for money being part of everyday life. (Often children at this age use a bank more as a toy, but that’s okay.) Let them enjoy dropping in coins, taking them out again, and then putting the coins back in. Give kids each a piggy bank with a slot for coins.It’s more concrete so that kids can see it-even if they don’t fully understand it. Use coins and cash when you can for saving and spending smaller amounts of money.For example, with preschoolers, talk about a “fun” budget, helping them learn that things like toys, eating out, water parks, and other “fun” stuff takes money. This can start early and become more complex as they grow. Nothing teaches your kids money management better than introducing them to the ways you track money (without overwhelming them). It teaches about how to read a receipt, and it also shows how expenses can add up. For example, when they ask why you don’t buy the most expensive brands, perhaps you show the whole grocery bill. Use the opportunity to introduce other ideas or concepts that are important to know. Don’t stop with a simple answer to your kids’ questions. By the time they reach the teen years, most kids will be able to keep things confidential if you ask them to. When kids get older, you may reach the point that they can know how much you make, the value of your home, or other information that some people consider sensitive. They also help think about priorities in your family’s budget. Instead, you might say: “That’s not in our budget,” or “Let’s talk about whether to get that later after we’ve thought about it.” Those responses can help kids learn planning and to delay gratification. Sometimes it’s easiest to say, “We can’t afford it”-which may be true, but misses a teachable moment. They don’t have to know it all right now. The goal is for them to be ready to manage money on their own when they’re more independent. Start with what they can really understand, and build over time. When children talk about their fears, you can address them directly-not by saying they’re irrational, but by reassuring them and correcting any misperceptions. Children sometimes interpret situations as being worse than they really are. That’s why some families create boxes for allowance, putting coins for portions into different boxes, such as spend, save, and give. Find concrete ways to show how money works. So many parts of money are abstract-particularly when more and more money use happens through plastic or an app. Before launching into an in-depth discussion in response to a question, first ask, “Why do you ask?” It lets you know what’s on your child’s mind so that you can tailor your response to the real question at hand-not something that will just go over their head. How much do you make? How much is our rent? Are we poor? Are we rich? Why can’t I go to any college I get into? Try these tips to maintain open communication with your kids while also helping them learn how they can responsibly handle money themselves. Talking about money-particularly your own money-can be hard for many parents.
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