Fly On Wall Street

How to Start Teaching Personal Finance to Your Kids

There’s a lot of uncertainty in the air as we enter this year’s “back-to-school” season. Whether parents are initiating their children into the world of masks and socially distanced at-school learning or facilitating at-home learning, many are embarking on uncharted territory.

While you may be looking for a little more recess as opposed to more stuff to pile on your plate, my time in the military gave me the idea to turn this “growth opportunity” into lessons with real-life implications. With that in mind, I’ve come up with three activities to get your kids thinking about finances.

The point of this exercise is to examine the budgeting process, budgeting entries, data collection, analytics and tracking. OK, not really — the point isn’t to punish your kids; the goal is to teach them the importance of putting a spending plan into action.

You can use a trip to the grocery store or commissary — everyone loves field trips — as the lesson’s centerpiece. Before you leave home, start with a discussion of how much money your family spends on groceries each month, as well as the amount you’ve set aside for the upcoming trip. Create a meal plan and an accompanying shopping list, and work with your child to estimate how much each item will cost. I bet this will be an enlightening activity; most kids, including ours as they were growing up, have no idea how much groceries cost.

With your list and budget in hand, it’s time to hit the grocery aisles. As you comparison shop, highlight the value of store brands. And when you come across temptations that aren’t on your list, remind your child of the importance of sticking to a budget. Jot down a list of the unpurchased items and their costs.

As with all learning exercises, don’t forget the after-action review. Together, total the items you skipped to show your student how small purchases can add up. This is your chance to link the concept of budgeting to your child’s everyday life. The $12 you saved by resisting the urge to stray outside your grocery list can go a long way toward a sweet treat or a fun family activity.

The next time you head to the store, put the kids in charge of part of the list. If they can finagle some savvy savings, let them reap the reward.

After a couple of trips, your child should understand that the goods and services we consume come with a price tag; they’ll understand how budgeting works; and they’ll have a better idea of needs versus wants. Most importantly, you’ll have sown the seeds for a life lived within means.

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