Four Tips to Instill Mindful Spending in Your Kids
Being a Financial Planner and a father to three young children, I have made it a top parenting priority to instill good spending habits in my kids. But, I have found it to be harder than I thought it would be. Financial topics can be complex, and some are hard for adults to understand. It’s challenging to break topics down to a level that will resonate with my children. Below are some tips that have helped me discuss spending in a mindful way.
1. Start the conversation early
Help your children understand that money is a means, not an end. Link work to dollars to purchases in a physical way. Break out the paper money and coins. Remember, children are often hands-on learners, and the lesson is more likely to stick if they are able to touch and feel, in addition to see and hear.
2. Teach them to save
Help your child set goals. If there is something, such as a toy, that they really want, help them figure out a way to save for it. This could include doing extra chores around the house to earn additional money, or setting aside their allowance for a number of weeks. Having a goal to work towards will help children understand that spending isn’t always simply transactional, but must be planned for.
3. Encourage giving back
Another important topic for children to understand when trying to instill financial mindfulness, is that wealth is not distributed equally. For children who are fortunate enough not to personally experience need, take time to explain that this isn’t the case for everyone. If it resonates with them, encourage your children to set aside a percentage of their allowance, or lemonade stand money, to give to a charity that is meaningful to them.
4. Be a good example
This is the most important, and probably the easiest, way to instill mindful spending habits in your children. You don’t need to show your six year old your net worth report, but you should include him or her in open discussions about how you earn, spend, and especially save money. This simple step can help kids create good money habits on their own.
At Affiance Financial, we believe in starting the conversation early and repeating it often. If you would like additional tips specific to your situation, reach out to your Financial Planner today.