Proper Spending For Kids

Most articles are on the topic of saving and savings. However, I think it is equally important to teach kids about proper and thoughtful spending.

Why should we teach kids about spending?

Spending is a behavior and as such it develops into a pattern. The sooner we help them create healthy and thought-based spending patterns, the better. It will serve their guide and foundation in handling their finances as they grow older.

When should we start teaching kids about spending?

Ideally, around the age of 3. This is when most of their mental faculties are formed and patterns of behavior start to develop.

How do we teach kids about spending?

Introduce the concept of money

Money is not an easy concept to grasp. Period. I mean, even us adults sometimes don’t quite understand the entire concept of money so, I won’t go that far. Let’s leave that to the financial consultants.

For starters for children, what we can do is to introduce the value of money. For example, this amount can buy 1 toy, but it can also buy 10 Jollibee meals, or it can buy 3 books, etc, whatever is relatable for them.

It’s also never too early to introduce the fact that money does not fall from the sky, more specifically, that “mom and dad go to the office everyday so we can buy milk for you” and so on and so forth.

Introduce the concept of “just enough”

Say, for instance, no matter how much or how little you have, just limit toy purchase to 1 toy per store visit (or any quantity you consider to be just enough). This will not only teach your kids to spend just enough but will additionally teach them to be decisive.

What my daughter and I (along with my husband, of course) do is to have her choose the one that she likes best. Since, we always do it, she got used to it and now automatically picks only 1 toy and heads out of the shelves.

The word ‘expensive’ is also something that we introduced early. When I say this word, she puts the toy (or food, or book, whatever it is) back. Once we went to Mercury Drug Store, she asked if she could buy the Hello Kitty candy that’s inside a really cute container that even has a fan. It was worth Php200++. The money I had on me was only Php110. I told her, “This is expensive, our money is not enough.” I was getting ready to launch into an explanation why that was important. She’s only 3years old. Much to my surprise, she said, “Ok Mom, how about this one?” Picked one that’s much smaller and only Php28.00. Deal!

Explain why we should stick to “just enough”

Whatever we do, we always have to explain to our kid. We want her to understand the concept of what we are doing vs just following blindly. This also trains her conceptual thinking, to always understand the rationale behind. I don’t expect her to work on concepts this early but to have that kind of thinking process is something we’re developing.

In the case of spending, we tell her about what this amount of money can buy. Like food – milk is the easiest thing for a child to understand – education, etc. Limiting spending when there’s not enough or to allocate funds to something more important or for the basic needs is something we can teach children as young as 3.

Be firm

When you start doing this, you and your child will adjust, especially when you start introducing limits if you’re both not used to it. But in order for you and your child to benefit from it, you have to be firm. The child may cry, throw tantrums or what have you, still be firm. If you keep bending your own rules, the child then sees that the way around it is to cry and you don’t want this.

The earlier you start, the easier it is for everyone.

Be consistent

Well, dear mommies, you can’t be the only one introducing these to your child. This should be consistent, regardless of the adult your child is with – you, your husband, the child’s grandparents, etc.

Consistency facilitates better understanding and faster adjustment.

Walk the Talk

You can’t say to your child, just get 1 toy if s/he sees you buying a dozen shoes. You know what I mean? Practice what you preach, the fundamentals when it comes to spending are similar whether applied to a child and adult.

Finally, remember to always teach and encourage an attitude of gratitude for whatever purchase was made. Though, attitude of gratitude deserves an article all on its own. πŸ™‚

Have you tried any of these in the past? How did it work out for you and your child?

For me, this is not just an exercise to increase our savings but more so, to teach our child proper spending (vs. stress shopping) and the other values and skills that she will get out of it – decisiveness, value of money and value for money, hard (and smart) work and conceptual thinking.

If you haven’t done any of these, it’s never too late. All the best, moms/dads! πŸ™‚

2 thoughts on “Proper Spending For Kids

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