People love to ask me about saving money with kids and lucky for these people, I LOVE talking about saving money with kids! There’s just one teensy, tiny problem: my kids are young. Super young. As in, one of them can’t even crawl yet…
So while I have a broad base of ideas to share on saving money with infants, babies, and toddlers, that’s pretty much where I max out on my personal experience. For handy dandy reference, here are just a few of the posts I’ve written on this absorbing topic:
- Fighting Back Against The Baby Industrial Complex
- The Gear You Actually Need For Your Baby (Or The Next Baby Shower You Attend)
- How I Make My Own Baby Food and Other Frugal Parenting Tales
- How To Fly With A Baby. On An Airplane. By Yourself.
- Our Thrifty And Simple Baby’s First Birthday Party
- How I Remain Frugal While Pregnant (!!!)
Sure, I could extrapolate and make stuff up about saving money with older kids, but in my experience, giving advice on stuff you haven’t done yourself is–uh–not a great idea. And why make stuff up when I have a braintrust of experts at my fingertips?! I know that Reader Suggestions are supposed to be about what you (the readers) want to learn about, but I’ll be honest here, Reader Suggestions are also themed around what I (yes, me, me, me) want to learn about! Because the older I get, the more I realize the less I know. Let me try that again: As I age, I realize I have more known unknowns and unknown unknowns. In short: there’s a lot I don’t know, but that other people do know. Ok, let’s get out of this linguistic loop and talk about our kids…
This actually IS a topic that a lot of you are interested in because you’ve been emailing, messaging, commenting, asking me in person when you bump into me (this happens more often than you’d think and I’m always doing something dumb at the time like buying a cupcake… ) all to ask me the pressing query:
How do you save money and embrace frugality with tweens and teenagers??? And teach them to be responsible with their money too???
In response I’m always like, “Uh, um, good question! I have no clue! Would you like to share this cupcake that I definitely do not need to be buying and/or eating?”
Additionally, when I polled our Frugalwoods Facebook group a few months back for your suggestions of Reader Suggestions topics, quite a few of you begged me to cover the topic of older kids + money. So today, we’ll do just that!
This is really a two-part question:
- Teens are expensive, how do I save money while raising them?
- How do I teach my teen about responsible money management?
I think that #2 begets an answer to #1 because when kids understand the mechanics of money–and the values-based decisions your family makes about money–it opens up the opportunity for them to feel enfranchised to save more and become a participating member in the family budget.
Welcome to my monthly Reader Suggestions feature! Every month I post a question to our Frugalwoods Facebook group and share the best responses here. The questions are topics I’ve received multiple queries on and my hope is that by leveraging the braintrust of Frugalwoods nation, you’ll find helpful advice and insight. Join the Frugalwoods Facebook group to participate in next month’s Reader Suggestions!
Saving Money With Bebes + Toddlers
You didn’t think I’d skip to your good advice that quickly did you? Hah! I have to
be longwinded earn my keep around here somehow. So I’ll share the only advice I do have, which is narrowly focused on how my husband and I save money with our two daughters, who are aged almost three years old and seven months old (as I said, super young). As I look back over our monthly spending for the past four years (easy to do since I share it here on the blog every month), I’m sort of shocked at how little we’ve spent on our kids. I’m fairly certain that our beloved dog (who sadly passed away earlier this year) cost us more during her lifetime (and she was worth every penny). The #1 way we’ve spent so little on our little bundles of spit joy is by:
Tactic #1: Source Everything Used
I cannot possible encourage this approach strongly enough. Babies need a bunch-o-stuff and buying it all new would make a considerable dent in anyone’s budget. But here’s the wonderfully delicious hidden secret of baby stuff: babies outgrow it in a hot, hot minute and then people want that
crap lovely stuff out of their house.
To whit, Littlewoods is a mere seven months old and has already outgrown all of the following:
- Bumbo seat (don’t laugh, my kids freaking loved this thing)
- Infant swing AND infant rocking seat
- Infant bathtub
- Three sizes of clothing: newborn, 0-3 months, and 3-6 months
- Floor playmat
If we’d bought all of this stuff new, I think we’d be out several hundred (if not a thousand) bucks on stuff a baby uses for only six months (or less!). Even with two (or more) children, that’s still a horrible return on investment. However, I’m now donating all of the above items to anyone who needs them. Sidenote to local friends: they’re yours if you want them, except for the Bumbo seat, which is already spoken for (I told you that thing is popular) and the infant swing and bassinet, which are already happily living with new families. I’m happy to give all of these things away for free because I GOT THEM ALL FOR FREE (or very cheap). All are used and all are a bit old, but they all work perfectly fine and will cycle through who knows how many more infants before they’re completely done with life on this earth.
And this volume of stuff and this cycle of receiving for free and giving away for free will continue with clothing, gear, toys, and books for the foreseeable future of my children’s lives!
I have a complete guide on how to find free (and cheap) used things which is called: How To Find Anything and Everything Used: A Compendium Of Frugal Treasure Hunting. And don’t you tell me that used stuff is disgusting, because I have a complete refutation of that right here: The Myth Of The Gross Used Things. Clearly I feel strongly about this because I actually have YET ANOTHER post specifically devoted to bebes and their stuff: Fighting Back Against The Baby Industrial Complex.
I’ll give you the TLDR version on how to source EVERYTHING used:
- Join (or create) your local Buy Nothing Group
- Join (or create) your local Parents’/Neighborhood/Town group/listserve/Facebook page
- Join (or create) your local Parents’ Buy/Sell/Trade group (usually through either email or Facebook)
- Frequent kids’ clothing/gear swaps and exchanges
- Visit thrift stores
- Shop at garage sales!
- Pick up free stuff off the side of the road (here’s my guide on how)
- Cruise Craigslist (although to be honest, I don’t find the prices on kids’ stuff to be all that great. I feel like it’s usually too expensive. But you never know!)
- Talk to your friends and neighbors who have kids and swap/share/trade items around. I currently have maternity clothes that keep cycling between a few of us as we go through multiple pregnancies (and these clothes were USED to begin with!!!). Which reminds me… who wants the maternity clothes next? I need them out of my basement!!! (although I’m keeping the comfy maternity yoga pants for now… )
- If you’re not sure where to start with getting plugged into “all things baby” in your area, begin with your local public library. They are HIGHLY likely to have some sort of (free!) baby playtime/story hour/sing-a-long for parents and babies where you can meet fellow parents (and babies!) and get integrated into the community.
I’ve successfully utilized variations of the above in both uber urban Cambridge, MA and uber rural Vermont, so I’d be hard pressed to imagine a city where some combination of the above wouldn’t work. And my uber frugal sister does the same in rural San Diego county, so there’s a coast to coast reference for ya.
I don’t get all of my hand-me-downs from friends or family and I also don’t get all of them for free. I’ve been known to spend upwards of $0.25 cents at a garage sale in order to get what I need for my kids. Hey, nothing’s too good for my babies. If you’re wondering where garage sale purchases are in our monthly expense reports, I lump them into the “household supplies” category. I have grand plans to itemize my garage sale (cash) purchases, but this just hasn’t happened yet… Now if I could use a credit card at garage sales, then we’d be in bizzness.
Tactic #2: Let Go Of Perfection
This is primarily a supporting tactic for tactic #1 because inherent in taking all used things is the mandate to let go of perfection. I am not, to be honest, super jazzed about the style or color of a lot of my baby stuff. It’s not what I would select if I were to go on a wild shopping spree of buying everything new. A lot of my kids’ clothing is not strictly my style (we have WAY more pink that I’d prefer) and there are quite a few stains and holes for us to contend with. But I also do not care. My children don’t care at this point in their lives, so why should I care? I fully realize there will likely come a day when they DO care, which is precisely why we’re tackling the topic we are in today’s post!!!
But at this point? It doesn’t matter that Babywoods is wearing jeans with a hole in the knee to preschool today (since it’s likely she’ll come home with even more holes/definitely a paint stain). And it doesn’t matter that Littlewoods is napping in a crib whose color is not my absolutely fave. These are fleeting, ephemeral times of my children rapidly outgrowing both cribs and jeans and it simply does not matter. My children are always clean (mostly… ), safe, fed, happy (mostly… ), and properly dressed for the weather. Beyond that? Who cares! I certainly don’t.
This is also an element of saving money in areas that don’t ultimately matter in order to spend in areas that do matter. While I find crib color to be an unimportant element of my children’s upbringing, I can imagine that later on, I’ll decide piano lessons or soccer are, in fact, pretty important. By saving in areas that don’t matter, I’m giving my future self the freedom to spend.
When you can embrace and enshrine a mentality that perfection is unimportant and when you can become ok with stuff that’s not your taste/style/preference, you will spend dramatically less money. And as you might’ve guessed, that approach holds true in all areas of life, not just with children. The less you demand your stuff to be perfect, the less you’ll spend. The less you require your material possessions to serve as embodiments of joy or as stand-ins for human emotions, the less you’ll spend.
In truth, this approach is a lot easier for me now that I’m being treated for postpartum depression. Through medication and therapy, I’ve been able to divest myself of this drive for perfection to a higher degree than I ever could before. And that is a wonderful thing for me!
Tactic #3: Start Early And Make It A Family Value
We instill all sorts of values, ethos, and concepts in our kids starting at a young age, so why not instill your financial values too? That’s what we’re doing with our kiddos and we treat money conversations with our three-year-old (ok, ALMOST three-year old) in the same way that we do all other aspects of life. Money is not a hidden or taboo subject and we work to integrate age and stage-appropriate financial lessons for our daughters.
We’re obviously not delving into the nuances of frugality or the complexities of compound interest yet, but we are integrating conversations about money into our daily lives because money is a part of our daily lives! Babywoods understands that you use money to buy things and that there’s a finite amount of money and a finite amount of stuff that we need.
We’ve taught her that we only buy what we need and that we shop from a list (most of our shopping is at the grocery store, so this is our most frequently cited example. Plus, she loves food so it’s a ready topic at all times for her). Babywoods will often ask about any given item: “Did we grow this in our garden? Did daddy buy it at the grocery store? Or is it a hand-me-down?” She gets the concept that these are three of the primary ways that things come into our home. Every time I receive a bag of hand-me-down clothing for the girls (most recently from a lovely Frugalwoods reader who generously mailed me her daughter’s old clothing, which is gorgeous!!!! And before that from our wonderful local friend whose two girls are in elementary school and who has impeccable taste! Thank you!!!!), I show the clothes to Babywoods and explain that someone outgrew them and doesn’t need them anymore and kindly gave them to us.
We discuss why we don’t need to buy new things and then we transition into a conversation about how we donate the things we don’t need anymore. I did recently catch her trying to “donate” her sister’s toys as she deemed them “no longer needed,” so we’re still ironing out the details there, but she’s getting the idea. Another easy concept for her to grasp is how fortunate we are–we often discuss how lucky we are to have a warm, comfortable home to live in and plenty of food to eat. Again, she doesn’t comprehend the full ramifications of this, but we are teaching her a sense of gratitude and abundance from the very beginning in the hopes that this will translate into compassion, empathy, and a recognition that she already has everything she needs.
My grand plan is to continue integrating money in a normal, non-shaming, non-secretive way in our conversations and home lessons with Babywoods (and Littlewoods!). Many of us adults have emotional hang-ups around our money, but kids do not. So don’t be afraid to broach the topic with your kids–they’ll likely be receptive and excited to engage around such an adult issue.
Ok I could probably wax all day about saving money with babies and toddlers, but that’s not (exactly) why we’re here today! We’re supposed to be talking about older kids! You know, kids who can walk and talk and have teeth! So let’s get to it.
How Frugalwoods Readers Save Money With Teens (And Teach Them About Fiscal Responsibility)
Emma wrote, “I read something a while back about how we should all be using larger allowances to teach our children how to manage expenses as opposed to buying them everything and giving a small amount of fun/pocket money. I thought it was genius. This amount would include anything you buy for your child anyway (for ex: clothing, shoes, lessons, after school activities, cell phones, computers, gifts for birthday parties). The line items, amounts, and how much you’re involved would vary based on the child’s age, their maturity level, and your budget. The idea isn’t to spend more than you otherwise would, but to instead to teach them how to make good purchases, manage finances, let them make real world mistakes (if they need to) and learn from them at home. This also minimizes fights about brands for older children and teens because they know exactly how much money they are allowed and can allocate it how they wish (within your rules). If they want more, they have to figure out how to get it. I plan to also get my children savings/checking accounts and a secured credit card to start building and managing credit early. :)”
Nicky chimed in to agree with Emma and shared, “I agree completely. When I was 13, my Dad sat me down and told me he was giving me a monthly clothes allowance. They would buy school uniform, a winter coat, and 1 pair of shoes – I’d have to buy the rest. I could choose whatever I wanted, but they wouldn’t top it up if I made bad or stupid choices. I could spend it all each month, or save for something more expensive. The allowance was £15 a month (equivalent to about £30 now), in cash, and I was given a small book to write down what I’d spent each month and what on. It gave me such a sense of freedom, but also responsibility, and I’m convinced it’s been instrumental in setting my approach to finances as an adult.”
Margaret wrote, “I make it a point to discuss wants vs needs: ‘You need shoes, you want Nikes.’ I offer to pay a certain amount for said shoes. If they want to work for extra money toward better shoes, then we will purchase the betters shoes.”
Lisa shared that, “She [my mother] had a certain amount she’d pay for something, and if we wanted anything beyond the price range, my sisters and I had to pay the difference from our own money.”
Coral said, “Seeing the family budget comes as a huge surprise for a lot of teenagers! When they see how much money is tied up in essentials and what is left for savings and fun it often really causes them to rethink their priorities.”I agree that looks like a great idea, when you save 50% I will match it” has seen a lot of ideas disappear on the way to 50%!! Other ideas come into the “I’ll drive it to the mall when you have the money!” category. Even fewer of those make it through to fruition.mHaving said that, needs are in the family budget, and, depending on family finances, sometimes wants as well! Joy is something we all benefit from, it makes life’s bumps and bruises a little easier to bear when we top up our laughter levels at every opportunity!”
Julie wrote, “My 2 sons had everything they needed but not everything they wanted. It amazed me that their friends had every new fad toy as soon as it came out. My children appreciated what we had and understood that we lived as well if not better than those who seemed to be in the same income bracket. They paid for gas and insurance for their very used cars; worked and saved money. My eldest bought his first house when he was 19; they both married women who shop in thrift stores and have passed that mindset onto my grandchildren. Children learn what they live ❤️.”
Lacey shared, “Example is one key. If kids see you engaging in “retail therapy” they will too. Teaching them to value time and experiences over stuff is crucial.”
Kathleen said, “My kids are grown up now but with my daughter, I used to say you can have ‘x’ amount of money which will buy you this and that brand new, but if we shopped used you can have a bag full of ‘new’ clothes more often. She agreed. She still shops used.”
Cindy wrote, “My kids aren’t teens yet, but we have started discussing money and wants/needs. At the store-if I’m buying some clothes for them we’ll pick out things that fit well, match clothes they already own, and they are excited to get. They see me pay cash and see dollars physically being exchanged for almost all my purchases. If we’re at target, they know I only have money to cover food expenses-so they don’t ask for toys, etc. The middle child has noticed that her older sister gets ‘new’(bigger) shoes and gear. I told her she can decide if she wants a new pair of rain boots like her sister, but if she agrees to wear her sisters boots that now fit her, I can put money in her piggy bank because it saves the family money. She opted for the money! When I was a teen, I worked part time jobs and babysat on the weekends. If I wanted to drive my moms car, I had to do errands like grocery shopping, etc for the family first. I really appreciated having my own money from earnings and gifts, it gave me an opportunity to really see how money can accumulate-and taught me how to save for things I wanted. But when I was a teen in the 90’s, there was a huge economic boom and we used to just hang out at the mall and use credit cards A LOT. I had to change some shopping habits over the next decade to realign myself to the realities of the recession. I think that right there was a huge life lesson.”
Naomi relayed, “I emphasized the importance of savings and being debt free. I told him always take a portion of his pay and put it away. Stay low debt to debt free and you can make it on a modest income while others with two high incomes live check to check. As soon as he started working he paid for all his own expenses. He bought his first car, ins, phone, electronics etc.”
Adriana shared, “My teens both have jobs. My daughter got hers when she was 16 (Chick-fil-a) and my son got his when he was 17 (movie theater). My daughter saved up to purchase half of her car (we matched). I would like to encourage more savings for both – budgeting is my next goal with both of them.”
Maithong wrote, “It starts young. We’ve been taking our kids to garage sales and thrift stores since they were very young–just like going to regular stores.
I wish I could post her homecoming dress, but it’s at the cleaners. She paid $13 and I paid $7 for her shoes, also from the thrift store. She will pay $20 for her ticket, from money saved.
When my children want something, my first question is do you have enough money, my second question is do you really “need” it. Often my kids will beat me to my questions–mom I have the money. And sometimes, mom I don’t need it, but it’s so cute (well, it’s their money).
My oldest daughter is 16 years old. She babysits every Friday for $20 (4 hours). She also earns money at home for work outside of her normal chores.”
Kelee said, “Our 15 year old has a job & pretty much pays for everything herself. We pay for phone, sports & school stuff but everything else she wants (clothes, music, entertainment, eating out etc) she buys herself. She is also quite generous & will sometimes take her little sister out for an ice cream or milkshake 😊.”
Lauren wrote, “My daughter is still young (3) but already trying to teach her. I buy all her clothes second hand and in a size up so they last longer. For fun activities we look for deals or discounts only (ie currently taking swim classes for only $10/month. Got a year pass to our zoo for $30 total. Always show her how I’m using my coupons at the grocery store etc). Building the base for frugality from a young age is key.”
Pauline suggests getting a, “prepaid phone – when it runs out you don’t have a phone until it’s topped up next month. Thrift shop for clothes – it’s trendy now, and they have in-season clothing at most of the consignment shops for teens. Teens can sell their clothes if they are in good condition to those shops. The kids know to go to the movies on the $1 day and get the “movie meal” so the cost of the whole thing is only $5. Tuesday movies only $6.
The high school softball team was selling coupon cards for $20 for local restaurants. You save a ton of money and get back the $20 in just a few visits. Dad takes the kids to the pawn shop to buy “like new” stuff there. Being fun and creative when getting things for teens teaches them how to save money, good experience for later in life. Kids earn money pulling weeds, babysitting, job on food truck/cafe, lifeguarding in summer. My niece was 18 and she needed $$ for college when she went to work at Comfort Keepers – it’s an eye opener for sure…she stuck it out for most of a year. Kids have to get good grades in high school so they can get a scholarship to college. Parents should not foot the bill for college when there are so many scholarships out there, and the kids should be aware of this starting high school to concentrate on getting good grades, doing service projects (looks good on the college applications), etc.”
Bobbi said, “I always told my children that I would pay a certain amount of money for clothes & if they wanted something better they would have to earn the extra money. Also I told my children no one will know your clothes are second hand. My daughter had a friend that loved a sweater she had & my daughter said her grandma gave it to her!! It was goodwill!!”
Marcia wrote, “I have a tween not a teen. He has a phone on the same plan as ours, but with fewer minutes. Pre paid. Activities. One sport, one activity. But he gave up the sport. So now it’s music. ($250 per year).
He gets an allowance. $1/ week per year of age and half goes into savings. He can earn more by doing special chores, not every day chores. But it is a struggle because kids like stuff. We just talk about money with him and go through the numbers.
Funny when he wants to go out for burgers, I tell him he can buy us all dinner and then he’s not interested.”
Laurie wrote, “We give our children a certain amount of money for clothing at the beginning of the school year. If they choose to spend it all on a couple of items then that is all they get. We have tried to show them by going through their things and really looking to see what they need they spend the money more wisely. Also shopping sales and second hand makes their money stretch further.
When it comes to phones we will provide the most basic one. If they want to up grade they pay for it themselves. Any extra curricular activities that cost money we only pay for one. If they want to do more than one either they pay for it or it can also be part of their birthday gift. We want them to understand we work hard for our money and we are trying to be very careful where we spend it. Having them pay for things means they take better care of them because it took a long time to save up for them and a lot of hard work.”
Deb said, “I discussed budget with my teen, telling her how much I earn, how many hours I work, and I take her grocery shopping so she understands how much we spend and how long that food lasts. She has a mobile phone, she pays one month, I pay the next. She has a holiday job and she budgets her ‘fun money’ from that. She doesn’t get an allowance, but I transfer a set amount to her savings account each month. Horse riding is a family thing, so costs us little as grandad breeds and breaks his own horses, and dance lessons are free because I teach at the dance school. Also teaching her the value of thrift shopping has been a useful tool.”
Grace shared, “I taught my daughter to think about how many hours she had to work to buy an item or an experience and if she thought it was worth it, she went for it. However, she quickly realized a skirt she didn’t need wasn’t worth an entire shift.”
Debra said, “RE sports – both of my kids worked out with their coach to help out with beginner classes in exchange for their private lessons. They paid half the cost of their tournaments, uniforms and equipment. They were more careful in choosing which tournaments it was worth it to go to and took care of their equipment and uniforms.”
Jonny quoted, “Mahatma Gandhi: ‘You must be the change you want to see in the world.’ Be the change you want to see in your family.”
Sara shared, “Our kids have their normal chores around the house. We do not pay for these chores, nor do they have an allowance. We have extra chores we will pay for (picking up dog doo, mowing the lawn). They can chose to do these things or not. We employ the MMM idea of a “bank of Dad” that pays amazing interest to encourage savings. We pay for clothes, activities, but will not pay for cell phone or additional clothes/shoes, random activities with their friends. That all must come out of their savings.
Our oldest is 13, but he’s quickly learning he must save his lawn mowing money to last him at least a few months. If he breaks his phone, he’ll have to buy a new one with money out of his savings or go without. For vacations, we no longer buy them souvenirs- if they want something, they pay for it. We talk a lot about how we like to use our money to buy experiences, not things and really try to walk the walk.”
Clancy wrote, “When our son had a part time job he paid for all of his extras. Eating out, gas for his car, etc. however, he’s now a senior in high school and he is too busy with school (college applications…) and sports to have a job so we pay for gas and give him the random $20 here and there. We have taught him frugality, budgeting, etc and luckily, he’s a kid that doesn’t have expensive “wants.” It’s not easy though. Sports cost a lot of money no matter the level. I firmly believe they are important and am willing to pay but it’s a separate line item on the budget. As for the phone, we do have monthly issues with “data overage” charges. Teens use a TON of data. I’d love to hear what other people do about paying for data etc.”
Jennifer shared, “I am very open with my teen/adult child about money. I want her to know and understand the cost of living. She works two part time jobs and goes to community college. She pays me a little each month to help cover her auto insurance and cellphone. I’ve preached so much about frugality, saving, etc. that she has a hard time parting with her money. I wish I had been smarter with my money when I was her age!”
Laura wrote, “I give my children £20 per month. I found giving money monthly as opposed to weekly has helped them learn to be better with money as when it’s gone, it’s really gone. I don’t top up. Also I’ve made them part of my frugality by talking with them about why I do it (what we are saving for and how it benefits them). If they understand why and have an invested interest then I think they can appreciate it more.”
I love the breadth of ideas here and I’m grateful to everyone who took the time to share their thoughts–thank you for contributing to our community! As I absorbed your advice and filed it away for my own future use, I created this list of ideas that echoed across many of your comments:
- Give teens a certain amount of money for each month or toward specific purchases (such as clothing for school). Any amount that they want to spend over that parent-determined total will need to come from their own wallet.
- I love, love, love this idea because you’re doing what you were going to do anyway (buy them clothes for school), but you’re enfranchising your kid to make their own choices, to understand how to budget, plus you’re reinforcing the wants vs. needs mentality, demonstrating the value of shopping at thrift stores and sales, and removing yourself from the argument loop about expensive items that your kid wants. The kids have to make the decision of what to purchase for themselves, which means they have to live with the consequences. This is such a great way to give kids real world experience with money!
- Share the family budget with them to illustrate your decisions as a family regarding spending.
- This one is awesome because it opens up the door for a broader conversation about your family’s values and priorities. Mr. FW and I have already started sharing some of these concepts with Babywoods in discussing why we choose to buy used items. I can imagine these conversations expanding as our girls age and I envision us discussing the compounding benefits of frugality and reduced consumption. This will give our kids a window into why we make the choices we do with our money and it will give them an opportunity to explore how they’ll craft their own financial philosophies.
Demonstrate the advantages of buying used.
- I 100% agree. Kathleen aptly identified when kids see that $20 will buy one t-shirt at a “new” store versus a whole bag of clothes at a thrift store/garage sale, they’ll have a visual representation of the mark-up of new items as well as an understanding of depreciation. This can then be extrapolated into conversations about larger purchases, such as cars.
- Explain the benefits of saving and investing by paying your kids interest on their savings.
- Kudos to Sara for bringing up this concept, which I think would be fabulous with older tweens and teens. Creating an interest-bearing account yourself would be an excellent way to model stock market returns for kids and reinforce the value of saving and remaining invested for the long-term.
- I’m also a proponent of having kids open up their own checking/savings account at a bank, but that doesn’t effectively demonstrate true compounding interest since those accounts are likely to yield a fairly low return. I’d love to hear more on this concept from parents who’ve effectively employed it.
- Encourage kids to make their own money.
- I completely endorse this idea! Mr. FW and I both had part-time jobs starting in middle school and continuing through college. I know there’s a trend these days to have kids focus solely on school/extracurriculars and not work, but I think that’s a grievous missed opportunity. There is NOTHING like working a minimum wage, part-time job as a teenager to teach you about the responsibilities of adulthood, the ability to get along with a wide range of people, the stamina to tolerate boredom/tedium in order to achieve a desired end, delayed gratification, and of course, how to manage one’s own money. School and sports teach you a lot–and I was a (mostly) A student involved in tons of extracurriculars–but working those often monotonous part-time jobs taught me about frugality. They taught me how to manage my time, how to communicate with adults outside of home/church/school, and they taught me how fortunate I am.
Have kids select just one expensive sport/activity.
- This is another winner of an idea. I think there are quite a few possibilities to explore here, including encouraging kids to find a way to defray costs themselves (such as by umpiring or helping a coach out with younger teams); and/or to think creatively about how to pay for their sports (perhaps their sports gear and registration fees are their only Christmas gifts, for example, which is the wise approach our August Reader Case Study family employs with their teenager).
- This is another area where doling out a specific amount of money could be useful. If a kid knows they have a finite amount to put towards their sport (and all related gear, shoes, and fees), then they are likely to be more motivated to find ways to either earn more money to pay for it or work out creative barter/trade arrangements. This makes a lesson within a lesson–the kid is benefiting from both participation in a sport AND from a financial/life lesson! Parenting win.
- Explain wants vs. needs.
- This is a crucial distinction for all of us to internalize, not just teenagers! I adore Margaret’s explanation of “you need shoes, you want Nikes.” That’s a simple, straightforward, totally resonant way of unpacking a fairly advanced concept for kids. I’m going to work on finding opportunities to use that simple explanation with my daughters since I find it an easy window into a complex topic that some folks never fully resolve throughout their entire lifetimes. Grasping wants vs. needs is a pathway to lasting happiness and fulfillment and so I can’t think of a more important overarching message to instill in our children.
- Start early!
- I think it’s never to early to start incorporating money lessons into a child’s routine. We’re already reading and counting and singing and talking with our kids, so we might as well sprinkle in a few mentions of money and how it operates in our society. Just start slow and advance as your kid ages.
The most important takeaway here, in my opinion, is that being frugal with kids isn’t simply about saving money in their upbringing. It’s about instilling sound financial messages in our children. Saving money isn’t an end all on its own–it’s a means to teach our kids how to value people over things and experiences over rote consumption. Instilling a healthy approach to money in our kids will save our families money, but more crucially, it will hopefully set our children on a path to finding meaningful work, identifying their deepest passions, and the ability to financially make those aspirations happen. How we use our money has a powerful impact on what we’re able to do with our time on earth. I think it’s imperative that we parents take the time to carefully explain the benefits of sound fiscal management to our kids, through both our actions and our words.