How to Teach Your Family to Live on a Budget

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By rumblebug
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Teach Your Family to Live on a Budget

While you may not have a problem living on a budget, your family may have different ideas. If your family is onboard with YOU being on a budget but it less interested in curbing their own spending, try following these helpful guidelines to keep everyone happily on track.

Difficulty: Moderately Easy

Instructions

Step 1

BE HONEST WITH EVERYONE

It's so important to be honest with your family (spouse and children alike) about family finances. Gauge what you think your child can and can't handle regarding intimate knowledge of finances. You don't need to go into how much credit card debt you have but tell them exactly how much money is left over after all bills are paid.

When your family sees what number they have to work with regarding activities and groceries they can begin to take stock of what's most important to them.
Step 2

GIVE CHOICES

Now that your spouse and children know what kind of money the family has to work with, tell the children they have some options. Give them the opportunity to make lists of what things are most important to them. For example, do they prefer swimming lessons over dance? Would they rather have money for spending at the mall or a subscription to cable? This gives your family the feeling that nothing is being taken away, they are just prioritizing.
Step 3

INVEST FOR YOUR FAMILY

If your children are given an allowance, continue to give it to them and let them know that comes out of the family pool of activity money. Take a portion of their allowance and automatically put into a savings account. Think of it as the money that gets put into your 401k at work, you never see it so you don't miss it but it's going to work hard for you.

Let your family/children know that a portion of their earnings is going into savings and let them see the statements and watch their money grow.
Step 4

GIVE THEM RESPONSIBILITY

Let your family know that when you pay them, you expect them to spend the money on what they want, but that is all the money they get. Don't give in to their impulse wants and needs at the store. Anytime you are going anywhere be sure to remind them that if they think they might want to buy something they need to bring money.

This will make it very clear that what they have in their wallets is what they have to spend (a nice guideline for adults to follow too!)

Comments

nanamusicgirl said

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on 10/10/2009 Very good!!! To teach children how to budget is a fantastic way to live. 5 stars.
Recommended you!!!!!

eac913 said

on 9/14/2009 Great information. Thanks.

AlexsMom said

on 10/25/2008 I really like the last one about responsibility. Each person, especially kids, have to deal with what they are given. If they want something extra, they'll have to save.

One way of showing them in a visual way how much money you have is to use Monopoly money. Make a pile of how much you have to spend each month. Then show them how much goes to each bill and how much is left over. Then talk about what it could be spent on. Would they rather have trendy clothes or be able to eat for the next month? This will help kids, especially teenagers I would think, understand really where it all goes so they don't think you could just buy them anything, but you're just too "mean" to do it.