As parents, we know the best way to teach our kids about budgeting is to set a good example. What we do in life is far more effective a teacher than what we say. How do you create a desire in your kids to develop a lifelong habit of good budgeting? The secret may be as easy as knowing what your kids like, and since you know your children better than anyone else, this approach is nearly effortless.
In psychology, we read about a famous experiment performed by Ivan Pavlov. His work with training dogs to associate a certain experience (a bell ringing) with pleasure (getting food) provided the basis for a better understanding of what motivates people (and animals) to initiate lasting change in their lives. The resulting theory is that people will repeat pleasurable activates, and avoid those that involve pain. Your children operate, on a basic level, according to this theory.
Removing the Pain of Budgeting for Kids
When it comes to budgeting, there is a certain amount of innate discomfort that comes with having to control our saving and spending. Spending feels good! And for a child, putting money away in the bank for a rainy day is a scary, abstract concept. Until your kids reach middle school or high school, they may have difficulty grasping abstract concepts, or concepts that are not concrete. 2+2=4 is concrete. The idea of money “growing” in a savings account (that your child can’t see) is abstract.
To help remove the pain from budgeting for kids, let them have access to their savings account statements. This gives them something more concrete to hold in their hands than merely a bank teller whisking their money away behind a counter. You can also use play money to represent the real money they have in the bank. Place the play money in a clear container that your child can hold or count whenever he or she wants.
Generating Pleasure During Budgeting
If you want your kids to make wise budgeting decision throughout their lives, you’ll need to develop a strong association early on that budgeting is pleasurable. This is easily done by thinking about what your child likes best. Perhaps your son lives for cookies and digging in the dirt. Maybe your daughter squeals over anything purple and pizza. Each child is unique, but the idea is to use what your child enjoys most as a reward for budgeting.
Budgeting Goals for Kids
In order to dole out the rewards, you’ll need to set budgeting goals for your child. You can start small, and you should reward your kids often. An ice cream treat every Friday for sticking to your written budget is a great beginning. However, don’t forget to celebrate the hiccups ands failures that occur while your child is learning. Missing the mark is sometimes a better lesson than being successful.
When your child messes up, celebrate a new start with a small reward. But be careful of creating a pattern of failing to stick to the budget in order to get a reward. After the first failure, change your reward to something of a supportive nature, like encouraging words or a hug. Just remember, the ultimate goal is to make budgeting a pleasurable experience for your kids.
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