Alternative Budgeting - Give Your Budget To Your Kids
When it comes to saving money and budgeting, sometimes it proves worthwhile moving outside the box of the typical advice given by the personal finance experts. While you may think you'll have to put a lot of effort into getting your budget in order, all it may take is doing a bit of outsourcing - to your teenagers.
I came across this method when I went to visit a friend who has a teenage boy who does an excellent job saving money. I was looking for information on good ways to teach children about personal finances and saving money. I figured that my friend must have spent hours each week coming up with innovative plans to teach his son about all the different aspects of saving and personal finances due to how well versed his son was in all aspects of saving money.
"So, can you give me an outline of how you went about teaching him?" I asked my friend.
He laughed. "I never did a thing," he answered.
"Then where did he learn so much?" I asked.
"On his own," he said and then told me the following story:
One week his son was complaining about his allowance being too small and that he needed more. Money was tight and my friend was frustrated and basically blurted out, "If you want more money, you can have whatever you're able to save this household..."
My friend thought that was the end of it until his son began coming to him with ways the family could reduce expenses, save money and then asked for payment when the money saving ideas worked.
"At one point, I ended up paying him $300 for his weekly allowance because of all the areas he was able to trim expenses," my friend said.
For those who have kids and are looking at an innovative way to both reduce their current budget as well as teach their children about personal finance and budgeting, giving your budget to your kids so they can search for additional savings may be a perfect solution. It gives them hands-on experience at looking for savings and in the process they will learn threw personal trial and error how budgeting works.
There are a number of advantages of monetarily rewarding your kids to find ways save money in your budget. While you must pay them for the savings they find, much of the savings won't stop after a single month. This means that in the long run, you'll be reducing your current monthly budget on a permanent basis while rewarding your kids for learning how to save money.
You will never have to worry about your kids complaining about not getting enough money for their allowance again. If the subject comes up, you can simply say that it's completely up to them how much they receive each week by finding ways to cut the current family budget (this being said, having 100% of their allowance tied to finding ways to save money is probably not appropriate).
By giving the kids the responsibility, they will learn many of the financial lessons that you probably have tried to teach them that have gone in one ear and out the other until now. Your kids will gain valuable budgeting lessons that they will be able to use for the rest of their lives.
While it may take a bit more effort on the parent's part to get something like this started (and you will likely have to brush up on your own budgeting skills as your kids will likely ask you a number of questions about how much certain activities cost), the benefits far outweigh the extra time needed.
After thanking my friend for his help and telling me the story about saving money and his son, I got up to leave. As we moved out of the room and into the hallway, we heard a voice call out from the other room. "Don't forget to turn off the lights when you're done in there," his son reminded. My friend rolled his eyes and I laughed. It was the only time I've ever heard a kid reminding their parents to turn off the lights and I guess that in itself says it all.
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