You are much more likely to be successful at reaching your goal when you’re not doing it alone. That’s why we talked about the importance of having a buddy or accountability partner. Of course, getting your spouse on-board with your financial goal is a huge win! Sometimes, however, we overlook the benefit of involving our kids in finances. In fact, in many cases we do our children a disservice by not involving them more in finances.
Sure, there are lots of arguments for not involving children in finances. We don’t want to burden our children with adult problems like credit card debt or not enough income. We may think it’s none of their business. We may be embarrassed to let them see our mistakes and shortcomings. We may just not have the patience to explain it all.
Bringing our kids into the process regarding finances has benefits, both long- and short-term. Kids learn through example– actions speak louder than words. If our kids follow our example (i.e. spending frivolously or living on loans) without knowing the big picture (i.e. drowning in debt), they’re going to have to learn the hard way. Being wise with money is a learned skill, which unfortunately isn’t taught in schools. If they don’t learn from their parents, children will have to rely on their own experience to teach them. Kids who learn to be smart about money from a young age will have a real advantage when it comes to the “real world.”
In my opinion, the benefits of involving kids in finances outweigh the drawbacks. Keep in mind, that what we share with our kids should be appropriate for their age. We don’t need to reveal every last detail. We also don’t need to be perfect in order to be effective teachers. It’s okay for them to know that we make mistakes too.
Getting Kids Involved in the Family Goal
Whether your goal is to get out of debt, to pay off your house, or to save for a family vacation, your kids can be a part of it! Involving kids in your family’s financial goals can help to unify your family. Talk to them about your goal and invite them to be on your team. Your excitement and enthusiasm (or negativity and pessimism) will be contagious! Tell them what changes you are making to reach the goal and let them know how they can contribute.
Here are a few do’s and don’ts
Do
- Let them know how they will benefit from the family goal.
- Tell them why you need their help.
- Explain specific ways that they can help.
- Notice and appreciate their efforts.
- Make it fun, like a game or a challenge!
- Involve them in celebrating milestones and other successes.
Don’t
- Don’t overwhelm them. Take their age and life experience into consideration.
- Don’t give them more information that they need. Numbers and details can be burdensome for some kids.
- Don’t make them feel guilty. Guilt is not a good or sustainable motivator.
Motivation to Make Sacrifices
Making changes to the way you spend money affects your kids. Maybe your kids are used to buying lunch at school and have to adjust to packing their own lunches. Maybe they are used to having fast food after soccer practice and will need to get used to waiting until they’re home for dinner. If you cut cable to lower your bills, you can bet that your kids will notice! Any way you slice it, your kids are going to be affected by your choices to become more frugal.
Without knowing the reasons behind your frugal changes, kids are likely to become frustrated by the new habits you are trying to form. They may even be disgruntled enough to thwart your plan to change. On the other hand, when your kids are involved in the family goal, they are motivated to make the necessary changes. They realize that you aren’t just trying to make their lives hard, but you’re actually trying to improve their lives. Goals help to motivate all family members.
Keeping You Honest
Kids make great accountability partners— almost too good sometimes! A few months ago we spent the entire day out and about. I had brought food with us for lunch, but I hadn’t planned any food for dinner. We were an hour from home and I didn’t have any plans at home either. I made the decisions to use the rest of the month’s budgeted “fun money” to go through a drive through for dinner. Instead of being excited about this very rare occurrence, my kids were confused and disappointed. “Why are we buying food here? Don’t we have food at home? I thought we were saving our money for Daddy’s law school?” If I hadn’t already ordered, I would have just gone home. The kids were trying to keep me on track!
Sharing in the Success
As part of the team, your kids will be able to share in the success of your goal, both in the end and along the way. They will feel that their sacrifices matter and are making a difference. Kids (and adults) are more likely to appreciate something that they worked hard to earn. By taking an active part in working toward the family goal, kids will learn the power and value of goal-setting. On top of that, they will be increasing their own financial skills and self-discipline, which will lead to future success on their own.
Challenge—Day 12
Think about how you can involve your children in your goal. What contributions can they make to be part of the team? How can you get them excited about your goal? Now go for it!
- What have you done (or seen done) to involve kids in family finances?
- How have you helped your kids get motivated about financial goals?
Additional Reading
Go to Day 13 of the Frugal Fresh Start Challenge!
Linked to Hit Me With Your Best Shot, Thrifty Thursday
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Great post! My oldest just turned 8 and he loves listening to Dave Ramsey every afternoon. He started asking questions when we were buying a new home and he was appalled that we were taking out a mortgage! So I think he’s on the right track with money already. I giggled at your kids giving you a hard time in the drive-thru, kids can be hardcore drill sergeant accountability partners sometimes! But I’m glad my husband and I started on the right rack financially while our kids were still very young, we didn’t have a lot of retraining and heartbreak to deal with.
That’s funny Mandy! Any impressive that an 8 year old would understand (and be appalled at) a mortgage! Way to teach ’em young!
Mine are only 10 months old but I can start thinking about how to introduce them to it later. My parents never involved us but you know money is tight when both parents work and you are eating nasty food storage. The dog wouldn’t even eat this stuff. Both my husband and I grew up with our families living paycheck to paycheck so we need to set the example by being more fugal not spending all we have because we have it.
You’ve got some time to decide how you’ll teach your kids. 🙂 That’s awesome that you’re both committed to not making the same mistakes your parents made!
Your kids are so funny! “Don’t we have food at home?” Snicker.
I have lectured my kids about the evils of credit cards for many years. One day, a friend was giving my younger son a ride home from school – he was probably 14 at the time – and drove through to pick up a pizza on the way. She paid with her debit card. We don’t use debit cards, so he assumed it was a credit card, and lectured her on using credit to pay for a non-essential. Fortunately, she’s a close friend and wasn’t offended, but I did have to explain all about debit cards later that evening!
That’s funny Kelli! That’s great that your kids understand the dangers of credit cards. 🙂
Just wanted to say that I love all your posts! I found you on Pinterest and just in time! My husband and I desperately need to get our finances on track, love the idea of YNAB. I’m going to give it a shot! Oh, and yes I do need to figure out how to involve my kids 😉 Thank you for your inspiration!
Thanks for the kind words Jacey! It’s always a great time to get finances in order! Best of luck! 🙂
I love how your children keep you on track. How funny! 🙂
One of my readers shared that they involve their kids with their debt pay-off by making a paper chain for every $100 of debt and then at the end of each month they celebrate as a family and the kids get to tear off the appropriate amount of links depending on what the family paid off for the month. The kids know they get to start saving for Disneyland once the debt is gone. Great motivator! lol. I thought it was a cute way to involve young children who may not completely understand debt. 🙂
That is a cute idea Nichole! Thanks for sharing! 🙂
LOVE this! My hubby and I are already teaching our 8, 6, and 4 year old healthy spending habits! I love what you say about not making them feel guilty or giving them more info. than they need to know! Great, great post and I am so glad that I stopped over from thrifty Thursday! 🙂
Cathy
Hi Cathy! Thanks for stopping by! That’s great that you’re already teaching your kids good spending habits! It will make such a difference!
As someone who works in the finance industry, I love everything about this article. Many people focus way to much on having fancy things and living above their means and they fail to think about what they will live on when they’re ready to retire. My biggest regret is not contributing to the IRA that my dad set up for me as a teenager much earlier.
My daughter is 7 months old right now- we fully intend to include her in our family’s finances and begin teaching her about budgeting and saving as early as is appropriate. She already has a bank account.
I love that you already have a bank account for your daughter!