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Teaching Children to Spend Wisely

Nov 06, 2023 08:15AM ● By Nikki Ducas

Are your children always asking to buy this or that with seemingly no real thought to their purchase? My automatic response to these impulse buys is, “Why do you think you need it”? Their response is, “Because I want it.” (Even if they don’t!)

To this day, my teen and tween still believe their mother and father are made of money and should buy everything and anything for them on a whim.

We’re constantly explaining that we don’t have a money tree nor can we print our own money. 

Our children do get a generous allowance with a lot of opportunities to make extra money around our house and at their grandparents.

Years ago, when our children were much younger, we started distributing their earned money into five categories: save, give, spend now, invest and sinking fund. As teens and tweens, they have come to expect this and are constantly asking, “How much do I have in my spend?”

Teach your teen and tween how to think about how they spend their money with these four thoughts:

Wait and See. We’ve instilled a “wait and see” rule. This gives them time to think about whether they really want to spend their own money on it and time to research if they are getting the best deal. Sitting on their spend now money also allows them to see how much they have. My tween likes to count the money in his wallet.

Wish Lists. Creating wish lists with your children helps them prioritize their spending money but is also helpful around birthdays and holidays when family members are looking for gifts to give. Since teens and tweens have bigger ticket wants, perhaps grandparents could contribute to the big-picture purchase rather than buying a bunch of smaller gifts.

Match Spendings. We encourage our children to contribute to their savings. If they have their eye on a bigger ticket purchase, my husband and I will split the expense with our child to make the cost more attainable. This is what their sinking fund is used for.

Family Ties. We gather as a family to discuss how money comes into our house and what expenses we need to spend money on. It is important that our boys have a healthy understanding of household finances, so they don’t live above their financial goals.

Encouraging your teen and tween to be good stewards of their money now will help to establish financial autonomy later in life.

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