Make This Summer a Summer of Money for Your Kids
Kids are about to be turned loose from school for the summer. They’ll want to spend the time playing video games, watching videos online and scrolling through social media. And when that gets old, they will complain they are bored and have nothing to do.
The average cost of raising a child to age 18 is estimated to be $233,610, according to the U.S. Department of Agriculture. If you don’t want that number to raise even higher, you better school the kids this summer in personal finance. Half of parents participating in a recent Bankrate.com survey said that they’ve sacrificed their own retirement savings in order to help their grown children with their finances from paying for college to cell phone bills and food.
A little fun is good and there is nothing wrong with indulging on occasion. But instead of letting the kids spend their entire summer break on the sofa, try the following ideas to get them moving and learning about personal finance in the process.
1. Avoid Authorizing In-App Purchases – You might think it is harmless to let your child buy new outfits for their avatar on their kid-friendly math app but giving them free reign to spend without earning is a slippery slope. Instead of functioning as your child’s endless ATM assign chores for them to earn the money they want to spend. They will learn to value it more and start to recognize the concept of smart purchasing decisions versus frivolous spending.
2. Don’t Let Them Spend Without a Budget – Some parents always say yes when their kids want to go to a movie or buy a new toy. They let their kids change activities the day after they decide they don’t like basketball or art class any more. Instead of learning that money is not in limitless supply, and needs must be prioritized over wants, kids never grow out of the “mine” mindset of toddlerhood. They learn to assume that if they want it, they can have it, with the swipe of a card. Instead, help you kids set a weekly spending budget for their summer and hold them to it. If they need extra cash barter with them to mow the lawn or wash the car or encourage them to babysit for the neighbors or tackle their lawn care to earn it.
3. Let Them Earn In It … It takes a team effort to keep any home in peak form, and “Summer Time” could be the time to get more support from your kids. With nothing else to do, your kids could be going to movies, hanging out at the mall or renting video games. Pretty expensive stuff. Instead of just handing over your wallet, let your kids earn the money they want. The chores don’t need to be big but let them help you out around the house and save you time. How much is your time worth?
4. Teach “Want It” vs. “Need It” … When it comes to learning to budget, recognizing “want it” versus “need it” can save anyone a bunch of money. The earlier your kids understand the difference, the better they will be at saving money. Have them get into the practice of asking “want it or need it” before each purchase. If being honest, most of the time “want it” will win and so will the kids savings account.
5. Motivate Excellence with a Bonus … Everyone loves to be recognized for going above and beyond. So this Summer if your kids surpass your expectations, give them a bonus in their allowance. Not only will it motivate them to do it over, but it will send a bigger message to your other kids you failed to get a bonus.
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