Frugality is an important part of life, and a lesson we want to pass down to our children—here are some suggestions for how to teach kids frugality and set them up for financial success!
Anyone who has ever taken a child through the toy section of a department store or past the dollar bins at Target knows that kids aren’t naturally frugal. There’s lots of “I wants” and “Can I haves” as you try to steer them away, explaining that mommy can’t spend $50 on a set of legos or buy a handful of cute knickknacks today.
Money is pretty straightforward, but can be surprisingly complex. Especially when no-nonsense dollars and cents go up against temptation and want. Ask any adult with a credit card balance—money doesn’t get easier with age.
That is, unless we teach frugality in the beginning.
What are the benefits of starting young?
Life lessons are learned young. Whether they’re good ones, like when dad shows his son how he holds the door for others, or not so good ones, like when mom has a soda with every meal, children pick up on these implicit signals and file them away for later use.
I notice this most often when one of my kids says something that I know came from my mouth first. Hearing my six-year-old say, “whatever” made me want to smack my forehead. I settled for biting my tongue the next time that sarcastic remark was sitting on it.
It’s the same with frugality. What we model for kids is what they learn and replicate. Except in extreme cases where an overspending adult sends a child into savings mode or a miserly parent leads their child to rebel and overindulge, our kids become mini-mes.
Teaching your kids frugality at a young age gives them an opportunity to internalize your lessons. Modeling responsible financial decisions also gives them real-life experience with those lessons, cementing them in your kids’ minds.
What if you’re not frugal yourself?
Teaching frugality without a model can be challenging, but not impossible. Don’t worry if you’re not the epitome of smart money-handling. Sometimes, a cautionary tale works just as well as a good example.
Our family is currently working through the credit card debt we amassed in our twenties. This gives us ample opportunity to discuss with the kids where we went wrong with our overspending, how interest rates work, and where our payments go.
I tend to overspend on groceries, excusing my excess by saying it’s food and we need it. But my kids have started to call me on this, asking if we really needed it all. Yes, my kids are money-shaming me. It’s a humbling experience, as well as a proud one.
But how do we get to this point? How do we teach our kids to be frugal, even beyond our own abilities?
How to Teach Our Kids Frugality
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Start with teaching them about money
First, kids need to understand money before they can understand how to use it wisely. Explain the value of your coins and bills. Show them prices in stores so they can see what $1 gets them in real life. Have them compare prices of similar products to see what options they can choose from.
Consider a lemonade stand or similar enterprise that will allow your kids to see how money is earned and how long—and how much work—it takes to get it.
Try one of these books to help you explain: Lemonade in Winter (for younger kids) and Finance 101 for Kids (for older kids)
Talk to your kids about basic needs versus wants
Kids can get confused (adults, too!) with the difference between a need and a want. I often think that my coffee is a need. But in reality, food, water, shelter, and clothing are the only needs that money can satisfy.
There are some great books that can help drive this concept home, like: Lily Learns About Wants and Needs and Do I Need It? Or Do I Want It?
Include your kids in some frugal practices
Kids learn best from doing. Have them clip coupons and look through sales flyers. Have them help you with the math as you create a price book and figure out unit prices.
Show them how utility usage affects your bills by going on the utility company’s website. Give them a sewing needle, so they can mend a coat rather than replace it. Take them with you as you shop thrift stores instead of buying new all the time.
Read one of these books about fun frugality for kids: The Berenstain Bears’ Dollars and Sense and The Kids’ Money Book
Do a no-spend month as a family
Set aside one month where you as a family will not spend money, except on essentials like groceries, gas, and paying bills. This can be a challenge, but also a great way to spend quality time with each other as you do fun and free activities together.
Cook together. Play games and visit the park. Repurpose things rather than replace them.
Kids also make awesome accountability partners because they have no compunction about calling you out when you err.
Try these resources for great ways to make it through a no-spend month: “Tips for a No Spend Day or Week or Month” and The No-Spend Challenge Guide
Open a savings account
It’s never too early to start saving. Open a bank account for your kids so they have a place to save. Most banks will allow this without any fees when it’s linked to a checking account. This makes it easy if you want to add to the account on birthdays, graduations, etc.
Talk to your kids about how much they should save. In our house, our kids receive a small allowance. They save 50%, tithe 10%, and can spend 40%—though they usually save their spending money in case something big comes up.
Read these books together to get into the spirit of saving: The Everything Kids’ Money Book and Rock, Brock, and the Savings Shock
I hope these tips on how to teach kids to be frugal help you navigate the financial waters and set them on the right path. Money can be an awkward topic, so let’s make it easy for our kids to broach and understand, and give them the tools to be the best stewards they can be.
What lessons about frugality have you taught your children? What methods did you use? I’d love to hear in the comments!
Want to read more about saving money and living frugally? Try these posts:
5 Ways to Save Money Right Now
How to Budget for the New School Year
How Changing Your Spending Habits Can Save You Lots
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