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Involve Kids to Improve Family Finances

kids putting money into a family money jar

When you face a financial crisis it’s important for everyone to pitch in. By involving the family in building a tighter budget, you’ll find it improves buy-in for any cutbacks you choose to make as a team. Your efforts are more likely to result in concrete, positive changes if you work together. For example, if one person is cutting back drastically and the other continues to spend money (or denies there’s even a need to curb spending), any spending cuts will be for nothing.

Brainstorm Ideas

Brainstorm together. Are there services, activities and nonessentials that your family is using that you could agree to cut back on, even for a while?

Save on utilities. Talk about ways to trim use of electricity, gas and water. Some examples: turning off unused lighting and electronic equipment; keeping the thermostat lower in the winter and higher in the summer; fixing a dripping faucet or toilet. Brainstorm other ways to cut back. Ask for ideas on possible ways to lower phone and Internet costs, too.

Eat great meals at home. The average restaurant meal costs about $15-$20 per person. The average home-cooked meal costs half that. Get the family involved by assigning one night a week to each grown family member to be responsible for the evening meal — planning, shopping for ingredients on sale, food preparation, etc.

Share chores. Encourage family members to do their part in contributing financially to the household. Consider asking older children to get a part-time job or offer neighborhood services — dog-walking, babysitting, mowing grass, raking leaves, other yard work — to earn a few extra dollars a week.

Get the Conversation Started

If money is tight, it can be tough to explain to children why you can't buy them what they want or continue to give them what they've always had — whether it’s the name-brand cookies or cereal they love or their favorite designer label in clothing.

How can you communicate to your kids that the family needs to cut spending? Here are tips to get the conversation started:

Be honest, but appropriate. Telling a child “no” to a request to buy something without giving an explanation won’t help. But take care that you don’t place the burden of worry on your child.

Answer questions. Avoiding the conversation might lead a child to imagine that things are far worse than they are. If you’re worried about a job loss or are feeling burdened by debt, tell your kids — on their level — that you’re taking steps to improve the family finances, and encourage them to do what they can to help.

Make it a contest. Enlist the entire family to create new ways to save money, or have a coupon-clipping party. Give the winner a special treat.

Teach by example. When you tell your child she can’t have a candy bar because it’s not in the budget, it’s confusing to her when she sees you stopping to buy a latte or soda every day. Take the lead and your child will follow.

Let them earn. If your child is old enough to get a job, encourage him or her to work to earn spending money.

Watch your words. When discussing money troubles, don’t assume your kids are tuned out. If you need to discuss serious topics with other adults, wait until you’re alone or in a truly private place, or until the children are asleep.

[Any reference to a specific company, commercial product, process or service does not constitute or imply an endorsement or recommendation by National Endowment for Financial Education.]