Financial education begins at home. Learning how to budget can be a family thing. What’s one way that you can teach your kids the importance of setting financial goals, saving money, and watching what they spend? Involve them in the process of creating your family’s budget.
Budgeting as a family can help you and your kids get a better grasp on where your money goes each month. It can show your kids the real cost of items. Help them learn how to set and reach financial goals. Here are some suggestions on how to budget as a family.
As you work on making budgeting a family thing, think beyond the spreadsheet and find ways to bring your budget to life.
Set Financial Goals as a Family
One of the first things is to work together to set some goals. You can set goals that will benefit everyone in your family, such as saving for a vacation. Or, set goals that will benefit individual people, such as saving for retirement, college, or buying a car.
In addition to setting specific goals, you can also chat with your spouse, children, and other family members about overall goals.
- Why are you making a budget in the first place?
- What do you hope to accomplish with it in the long run?
When your family has a clear understanding of the goals of the budget, they will be more likely to get on board with it.
Talk About Household Expenses & Ways to Save
Next, have a chat with everyone about household expenses. You don’t have to bore your kids with talk of the mortgage or other fixed expenses. Instead, focus on things that typically change from month to month.
- Entertainment (Netflix, Hulu, Apple Music, Gaming, etc)
- Groceries (especially with the rising cost of food)
- Utility bills (electric, heat, water, cell phone, etc)
- Going out to eat
- Extracurricular expenses (dance, sports, hobbies, etc)
If you’ve been keeping track of expenses, let your family see how much you have spent in each category over the past few months. If you haven’t been tracking your expenses, now is the perfect time to start. Give everyone a small notebook and ask them to record every purchase they make. Meet at the end of each week to chat and compare.
Once you have an idea of what your family is spending money on, it’s time to brainstorm ways to save. You might start using coupons or grocery store sales to cut down on food costs. If you usually eat out a few times a month or get take-out, look online to find discounted offers. Encourage your family to get creative when it comes to finding ways to trim expenses.
Remember, you don’t want to make anyone feel bad about spending money. You’re just working together to see where you can save. You still need to enjoy your life.
Talk About Needs vs Wants
This can be a hard concept even for adults. You need to put gas in your car to get to work. You want to buy lunch out. Depending on their age, kids don’t understand that they don’t NEED the latest iPhone or hottest sneakers. They WANT those things.
- Needs are things you don’t have a free alternative for (gas in your car, cell phone)
- Needs are things to keep you safe and alive (food, shelter, paying your bills)
- Wants are things you can physically live without (Starbucks coffee, playing online games)
- Wants are things you can put off buying until you’ve saved up enough money (new technology, vacations)
The next time your kids ask for a new toy, something for school, or more money for Roblox, decide if it’s a need or want using the above sentences. Figure out together where it falls.
Create a Visual to Track Progress
After you’ve set a family financial goal, track your progress. You can create a chart with $0 at one end and the amount of your savings goal at the other. As you set money aside for the goal, have your kids color in the chart. This will show everyone how far you’ve come. You can also try using an envelope system. If your kids get an allowance, have them divide up their cash into envelopes based on how they hope to spend or save it. You can use envelopes to track household expenses, too. When it’s time to go shopping or make a purchase, ask your kids to check how much is in the envelope before you head to the store.
Celebrate the Milestones
Depending on the size of your family’s goal, it might take time for you to reach it. To keep your kids excited about achieving the goal, break it down into smaller milestones and celebrate when you reach each one. For example, if you’re trying to save $3,000 for a family vacation, celebrate every time you save another $500.
You also don’t want to blow your savings, so keep it budget-conscious. Some ideas are:
- Ice cream sundae bar at home
- Sleepover with a friend
- Extra $10 for their online game or music app
- Stay up late for a family movie night
- Choose your own toy for $10 or under
- Dinner at their restaurant of choice
Celebrating milestones along the way will help you and your family stay motivated when it comes to your budget.
We’re Here to Help You Learn How to Budget as a Family
When it comes to budgeting your money and growing your savings, a variety of tools are available to use from the credit union. We can help you automate your savings and better achieve your financial goals. Call, chat, text, or stop in! We’re available M-F, 9am-4pm ET. (315) 671-4000.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.