If you are the parent of a child approaching their teens, involving them in conversations about the family budget can help give them an understanding of how money works in the real world. From my experience, I have found it can emphasise some fundamental money principles, such as the importance of prioritising spending, understanding the difference between needs and wants and knowing how to make financial decisions.
Here are some instances when you can introduce your 10 to 13 year old to conversations about the household budget.
When you decide to say ‘no’ to something they want
When your child asks for something, this can present a good opportunity to talk to them about how the family budget works. I like to use this moment to reinforce that money comes into the household through work and saving, and is used to cover a variety of costs, such as the family’s food, and utilities like the internet. Through this, you can explain the importance of prioritising spending. If they are still set on getting the particular item, to keep things positive discuss how a savings plan could help them achieve their goal.
When they compare themselves to their friends
It is normal for tweens to compare themselves to their friends, and you may occasionally hear them say that their friends have more things or pocket money than them. This is a good time to gently explain that every household has its own budget, and some will have more money for spending than others. The key is to emphasise the things they have, and reinforce that there is a difference between needs and wants.
When you are making household budget decisions
The more your child feels part of your decision making when it comes to money, the more they will appreciate how important the family budget is. Next time you are making a bigger purchase for the family such as a new car, consider including them in the conversation and explain your decision making process. Asking for their opinion will make them feel included and can help them to develop a sense of responsibility when it comes to financial decisions.
As they get older, you can start to give them more financial responsibilities, such as paying for certain purchases themselves through their savings, so they can deepen their understanding of how you make financial decisions.
Visit The Beanstalk for more helpful tips on teaching your kids about money.