Kids And Money: Kids Learn Personal Finance By Watching
Children learn a lot about how to behave simply by watching their parents. One can talk endlessly with their kids, but actions speak louder than words. A parent can teach invaluable lessons about personal finance simply by making financial decisions in plain sight, as I was reminded with a recent incident with my son.
We were traveling out of town with my family, as well as one of my son’s friends. Using the envelope method to budget our several day car trip, each day had an envelope for gas as well as snacks for the day’s car ride. As we filled up on the first day, I instructed my son and his friend to go inside the convenience store and pick out whatever they’d like and I’d be in shortly to pay for it. Before I finished at the pump, the boys exited the convenience store.
“Hey, I was going to pay for your snacks,†I said as they entered the van.
“It’s fine, Dad, “ my son replied, “We can buy our own snacks.â€
“But I have an envelope,†I said, laughing.
Before going inside to pay, I reached inside the van and pulled an envelope from the center console. I looked back at my son and said, “Each day has an envelope for gas, and one for snacks as we travel.â€
He nodded his head.
The next morning, after staying overnight in a hotel, we again stopped at a convenience store to fill up before hitting the highway for the day. As I removed the gas cap, my son and his friend came around the back of the van to talk to me.
“Do you have an envelope?†my son asked.
I smiled, and handed him the envelope labeled Snacks.
Kids learn by watching their parents, so it makes sense that if we want to each our kids good personal finance habits, we should handle our own finances in plain sight. Here are just a few things that can be done out in the open to give children good financial examples to follow:
- Budget Discussions : By holding budget meetings in plain sight, kids see that it takes effort and teamwork to make the family finances run smoothly.
- Purchase Discussions : When shopping together, it’s important for kids to hear parents go through the process of deciding to make a purchase. Hearing them spell out the pros and cons and whether it fits in the budget helps them form their own process of deciding to go ahead with a purchase or not.
- Say No : Don’t be afraid to qualify the answer of, “No,†with “It just doesn’t fit in our budget right now.†It enforces to children that they cannot buy everything they want, and that it’s OK to have to wait for something.
I taught my son valuable budgeting techniques during our trip. He was exposed to the envelope method, but more importantly he saw that my wife and I had thought about what we needed to spend our money on each day and laid out a spending plan for our trip. We could have sat at the kitchen table and talked about it, but seeing it in action likely left a much deeper impression.
How about you, Clever Friends, do you purposefully make your financial decisions visible to your kids? As you were growing up, what did you learn from your parents simply by watching them?
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Brought to you courtesy of Brock
Brock is a software engineer by day and personal finance blogger at night. He is a fitness junkie and enjoys grilling and smoking meat. Married with two children, Brock strives to improve his skills as a husband and father, and is always on the lookout to stretch his family’s budget as far as he can.