Why you should include your kids in family budgeting discussions
Most parents think they shouldn’t saddle their children with grown-up issues like household finances.
But whether you openly discuss it with your children or not, kids are impacted by money matters. That may be through seeing their parents squabble over money or failing to understand why you can’t afford to buy them the latest gadget that all their friends have.
Think of it from your child’s point of view. They see you slip a card into a machine, and cash magically comes out. They may not grasp that the money from the ATM is earned and can run out if you don not budget correctly.
Including your kids in budgeting discussions will open their eyes to how you earn, spend and save money.
If you hold regular family budget meetings, your kids will learn these four important lessons.
1. How budgets work
Most schools don’t teach financial literacy. So the onus is on you as a parent to equip your kids with financial management skills. One way to do that is by including them in family budgeting discussions.
You’ll be able to show them how a budget works and how to use it to plan for fixed expenses and unplanned emergencies. You’ll be able to stress the importance of saving to create a financial buffer when unexpected events occur.
As a family, you can decide how to spend discretionary income (money left after all the household expenses are paid). You can also agree on savings goals, like saving for a family holiday. When kids feel included in important decisions, it can foster a stronger family bond.
2. How much it costs to run a household
When your kids become aware of how much you spend on household expenses and how much is left to carry you through the month, they’ll begin to understand why it isn’t always possible to buy them the things they desire.
It also makes them aware of how unexpected expenses (like car repairs) or additional costs (like paying for a school excursion) can put a strain on the month’s budget if there are not enough reserves to fall back on.
3. How to make responsible financial decisions
Most kids are inclined to spend their pocket money immediately without questioning if they’re buying something they need. When kids are educated on money management, they’re able to discern between a want and a need and think twice before spending money unnecessarily.
There are budgeting tools, like the FLX App, specially designed to help kids learn to manage their pocket money. With the FLX App, kids can keep track of money coming in versus money going out and set specific savings goals. It’s an excellent way for kids to learn budgeting skills.
4. The difference between good and bad financial habits
Habits learned in childhood, whether good or bad, tend to follow into adulthood. Once cemented, it’s much harder to undo bad financial habits later in life. The earlier your children adopt healthy financial habits, the greater their chances of building financial security.
So don’t shy away from including them in financial discussions and getting their input into the monthly budget. The knowledge they’ll gain will lay the foundation for a strong financial future.
FLX is a great tool that can help your child learn how to earn, spend and save money. You can learn more about FLX here.
This is general advice. Read the PDSs & TMDs at www.flexischools.com.au/legal before deciding if FLX is right for you. The FLX Services & Flexischools are provided by InLoop Pty Ltd ABN 27 114 508 771 AFSL 471558 (trading as Flexischools). The FLX Prepaid Mastercard is issued by EML Payment Solutions Limited ABN 30 131 436 532 AFSL 404131 pursuant to license by Mastercard Asia/Pacific Pte. Ltd.