How to teach your kids to budget this summer and more
May 18, 2017
Summer is drawing nigh, that erstwhile family season of relaxation and slowing down. In today’s world, it’s just the opposite. It’s all about planning and activities — planning what the children will do while not in school, planning how to get your children to and from those activities while you work, planning vacations, planning to ensure family life runs smoothly when the reliable structure and schedule of the school year is pulled out from under you like a rug.
I’ve been working on my family’s summer calendar practically since last summer ended. With just a few days of school left, I felt confident that I’d struck the right balance of family time, sports and travel for my teenage son. Then yesterday, it occurred to me: I, a financial adviser, hadn’t planned anything that would advance his financial savvy!
Here are some easy ways to insert some financial acumen into your child’s summer:
1. Give kids a vacation allowance — and stick to it.
Summer vacations are the perfect time to discuss budgeting, a supremely critical financial skill. Before going on vacation, determine how much discretionary spending your children will have. How much cash will you give them and will they be allowed to dip into their own savings?
Once you’ve determined the amount, sit down and talk about it. If each child gets $50 for the week, explain this is $7.14 per day. Make sure they think about how they’ll keep up with the cash while traveling. If on day one, they blow all their money on amazing live sea monkeys that turn out to not be so amazing, they need to understand you’ll not be buying them any more souvenirs.
Allowing your child to experience the consequences of their actions is invaluable.
2. Take them to the grocery — and talk about that candy bar.
A simple trip to the grocery store provides another financial learning opportunity. No matter the age of your children or grandchildren, they can use your guidance on how to be a good spender. Explain what an impulse purchase is and why candy bars are placed near the cash registers.
A candy bar may seem like nothing to worry about because the cost is small, but this lesson isn’t about the size of the purchase. It’s about not succumbing to temptation and purchasing something without considering the ramifications. Talk about the nutrition and food volume of a candy bar compared to, say, a dozen eggs, which is equivalent in price.
Consumption is part of our culture and marketers bombard us with messages to buy things we don’t need. Point these strategies out to your children so they aren’t so easily and blindly “sold.”
3. Make them work a summer job — and watch them learn.
For many of us, our first job was a summer gig. A summer job will teach a child more about personal finance than any lecture from mom and dad ever will. If your teen is working for minimum wage ($7.25 here in Tennessee) and a movie tickets costs $13, let him or her decide if going to the movies with friends is worth two hours of work or not. Besides learning the value of hard work and the value of a dollar, your child may begin learning what kind of work interests them.
They may discover they love interacting with customers as they bag their groceries. Even the process of applying for a summer job is a great experience for teenagers.
Enjoy your summer and make some memories, but don’t forget to give your children some financial lessons they won’t forget either!
Phoebe Venable, chartered financial analyst, is president and COO of CapWealth Advisors, LLC. Her column on women, families and building wealth appears every other Saturday in The Tennessean.
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