Between gifts, activities and family trips, the summer holidays can be costly. But the new year is the perfect time to regroup with a back-to-school budget. Whether your kids are younger or well into teenagehood, it’s a great opportunity to teach them budgeting skills and build a foundation for lifelong financial confidence.
Map out expenses and a simple budget
With holiday spending behind you, show your kids how to review their finances. Work together to map out their expenses – hobbies, subscriptions, after-school treats with friends – then help them collate everything into a simple budget.
Darlene Neu, financial wellbeing consultant and co-founder of The Money Collective, says this is an ideal moment to model your own approach to managing money. Share your budgeting process or some real examples of spending and saving. “Showing kids what you do with money helps them understand where it goes and how to plan.”
Establish realistic goals
Guiding kids through a budget works best when they have clear, doable goals that motivate them to manage and appreciate money. Neu recommends sitting down with them to establish a goal and a suitable timeline – one that’s long enough to encourage regular saving but short enough that it’s achievable. And while you might choose to chip in a little towards the end, avoid over-contributing – this takes away from their learning experience. “The act of saving and achieving builds self-esteem,” she says.
When your child accomplishes their goal, Neu suggests you celebrate it in a way that reflects what they value – like a dinner out or a trip to the movies. “This helps kids feel proud of themselves and reinforces the positive habits they’re learning.”
Talk openly about money
If money isn’t already a regular topic at home, now’s a great time to start the conversation. Just like chatting about the school day, you can bring money into the mix at the dinner table. The more it becomes part of regular discussions, the less daunting it feels – and it shows your kids that budgeting can actually be empowering, rather than something stressful or emotional.
“The best thing we can do is be honest about how we manage a budget, how much we earn, how much things cost at the supermarket,” says Neu. “The more real we can be, without being scary or overly emotional, the better. But don’t make it boring or clinical. Have a warm, open conversation about the ups and downs of money.”
Teach the value of saving with pocket money
Pocket money is a simple (and surprisingly powerful) way to help kids learn about budgeting. Whether you give them a set amount each week or they earn it through chores, it’s their chance to practise managing their own “income”. And according to Neu, the trick is to step back a little – let them have that independence, even if it means making a few mistakes along the way.
“If kids save, they learn the reward of being able to buy something bigger later. If they spend it all, they learn what it means not to have money for something else,” says Neu. “Don’t top them up – that’s how they learn the value of saving. The key is for parents to set boundaries and stick to them.”