Plan YOUR Work!

Work YOUR Plan!

Don't tell me where your priorities are.

Show me where you spend your money and I'll tell you what they are.

-James W. Frick

Tuesday, April 24, 2012

Why can’t we afford it?: Teaching your kids about money in a tough economy

Personal Finance 4 The People is pleased to team with others who are able to share their expertise in various areas. We hope to combine our efforts to bring a greater financial effort inorder to help you reach YOUR Financial Independence. Today's guest post comes to us from Lake Jones.

Money is a difficult topic to discuss with kids during the best of times. It’s right up there with where babies come from and why the pet hamster died. It’s an even more difficult topic during a time when the economy is difficult. Parents are hesitant to talk about a topic they feel they haven’t figured out themselves. Challenging though it may be, teaching your kids about money it isn’t impossible. It can even be fun. Here are three simple tips to guide your discussion about money with your kids:
1. Let your kids participate in the process
Most kids enjoy helping out, particularly younger ones. You can harness that enthusiasm by allowing your kids to share a little of the family burden. Make sure the burden isn’t too heavy for their small shoulders, but encourage them to take on age-appropriate responsibilities. For certain, you as the adult are team captain, but don’t always sideline your kids on the bench. Put on your coach hat and let them get in the game. Have everyone donate items to a group EBay sale to save for a family vacation.  Prepare for trip to the supermarket by letting the little ones clip coupons and hunt for deals. Send them on a mission to find free or cheap movies in your local library. Let the older ones use their Internet savvy to find online deals through sites like Groupon or Living Social. Encourage or allow teens to get part-time jobs to finance their personal items instead of stretching the family budget. Turn managing the family budget into an adventure. You might find that older kids and teens are less enthusiastic as younger ones. In that case you may have to discuss more seriously with them the need to make family finances a group effort.
2. Show and tell
Most kids think their parents are superheroes who can do anything, be anything, and give them anything. That image is a little hard to maintain in a tough economy. Parents are struggling to pay bills, provide food and basic necessities all while keeping up with the demands of a consumer culture. It’s tough to see your kids yearn for the latest phones, clothes, and games and not be able to provide them. Many parents become frustrated when their children ask for items that the parent cannot afford. “Why is he asking me for a video game when the electric bill is due?” Children are inherently self-centered. Their needs and wants are foremost in their minds and you are their only source of fulfilling those wants and needs. Your kids won’t know that you’re struggling unless you tell them. Let the kids see your budget. Demystify the process of making financial decisions. Be open, be honest, and make them part of the process. Explain your rationale for making certain purchases and not making others. Let the teens create a spreadsheet or download an app to manage the family budget. Get input on how to tweak the budget as needed. Let your kids make suggestions on how to raise money to increase the family cash flow. The next time your child asks for something you know you can’t afford, remind him or her about the budget. Try to make room in the budget for a small treat or two. A little reward can go a long way towards keeping everyone motivated.
3. Don’t break their spirits
Kids are optimistic. Keep them that way. Try not to let your adult cynicism creep onto them. Be realistic, but not pessimistic. It may be difficult to keep yourself positive during tough times, but remember that kids will feed off of your energy, so try to be optimistic for their sakes. Buffer negatives with positives: “We can’t do that, but we can do this”, or “We can’t go this month, but if we save, we can go next month”. Set goals. Work as a family toward paying a debt or keeping the electricity bill below a certain amount. Sweeten the deal with a reward for reaching the goal. Make it a reasonable one: a matinee move, a trip to a free museum, a discounted dinner at a restaurant, but something that will motivate everyone. One thing to remember is that if you’re having a hard time, chances are others around you are as well. In that case, get together with other parents in your community, church, or child’s school to host fun, cheap or free fun days: discounted group trips to local amusement parks, backyard parties, day tips downtown, etc. Your kids will remember the fun they had with their friends…and hopefully the lesson you sneak in about how simple things sometimes yield the most joy.


No comments:

Post a Comment