As our country’s leaders continue to debate the state of our national economy, you have the opportunity as a parent to provide your children with a lasting life lesson in Economics 101. Using current events to teach your children is what educators call “a teachable moment.” All families can take this opportunity to examine their own budgets and to teach their children how to budget.
The first lesson learned from the state of our country is that you can’t spend more than you earn. In many families, using plastic money is a way of life. Your child may not understand when the extra money runs out if they only see you using a debit or credit card. For a month, try using cash money put into evelopes and distributed with your child’s help.
Many parents prefer not to discuss family finances with their children since children often share information with others. However, there are many ways to discuss finances without giving children unnecessary details. The game of Monopoly is one opportunity to learn while having a good time. Used during Friday night game nights, children quickly learn the value of saving smaller amounts of money to purchase something they really want like hotels on Boardwalk and Park Place.
Monopoly money can also be used to discuss family budgets. Let your child count out the money your family earns in a month and then make piles for each necessary expenditure. Be sure that savings is included in your necessary expenditure list. Then make a game of going to local stores to see how far what’s left goes depending on where you shop.
Make a list of five things your child would like to have. Perhaps a pair of jeans, a video game, a couple of shirts, and a new game. Take a notepad with you and go to River Ridge Mall first. Go into the trendy stores and write down prices for the clothing items. Follow River Ridge’s trendy stores with the chain stores like Sears and J C Penney. Again keep track of the cost of the items on your list. Stop at Game Stop to see how much the video game would cost and at Toys ‘R Us to see how much the board game would cost. Then go to Wal-Mart and compare prices for the items on your list. Your child will be surprised to see how much further your budget dollars go when you forgo the name brands and shop at less expensive stores. To stretch your dollars even further, visit consignment shops and check how much like items cost.
You can use this same concept when shopping for groceries. Sit down with the Sunday paper and look through the ads to make up your week’s grocery list. Talk about buying what’s on sale and building your daily menus around specials. Teach your child about clipping coupons. You could even make your child responsible for cutting coupons and share the profits with him.
Another lesson for your children using Monopoly money is to decide how they can save up allowance money for something they really want. Make piles for each week or month’s allowance money, take out what your child needs to save or contribute to help others. Count how much is left in a week, in a month, and in several months. Talk about how your child can put off the instant gratification of buying something now for the more lasting gratification of a larger item later.
Teach your child the concept of ‘paying yourself first.’ Explore investment opportunities with your older children and teens. They will be amazed to learn how quickly even small investments can add up to a lot of money. This is a lesson they can take forward into adulthood.
As a family, decide together if there are goals your family would like to save to work toward like a family vacation, a newer car, or your child’s college education. Then when your child wants to buy something that is out of your price range, he may understand better why the answer is no.
Using the present to teach life’s lessons is something educators do every day. As a parent, it’s something you can do too that will help your children succeed in life.