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How To Involve Your Kids In Your Family Budget

Your family budget affects more than just you. If you have kids, they are directly affected by the financial choices you make. While you shouldn’t hand over the keys to the family budget to them yet, you can involve them in the process. Keep reading to learn ways to incorporate your kids into your family budgeting and other ways to teach them about personal finances.

Financial Literacy and Kids

The task of educating kids about money is slowly becoming more of a priority in America. The Council for Economic Education’s 2020 Survey of the States revealed that 21 states now require high school students to take a personal finance course, which represents an increase of four states since 2018. While the number is increasing, this still means that 29 states do not include such requirements.

Parents can provide financial teaching moments at home well before kids ever enter a high school personal finance class. We may not have grown up in a household where we discussed money, but that legacy doesn’t have to continue with children today. Parents can use everyday experiences and discussions to prepare their kids for the tough financial decisions they will make in their later teens and early twenties.

Ways to Involve Your Kids in Your Family Budget

One of the best ways to teach your children about the value of saving is to involve them in the family budget. Often, kids are excluded from their parents’ money conversations.

Have Regular Money Conversations

To offer a personal example, growing up, I don’t remember our family ever talking about money. I had no idea how much my dad earned at his job, and I never asked. I just knew that we had a house, food in the fridge and went on vacations almost every year. I had no concept of how money worked, beyond saving up for the latest gaming system or a pair of basketball shoes.

Kristin Stones, founder of Cents and Purpose, had a similar experience. “When I grew up, I was allowed to know nothing about our bills or household expenses, and I feel it’s important to prepare my children for what ‘adulting’ looks like, financially,” says Stones.

One of the best ways to get your kids involved in the family budget is by having regular conversations about finances. This could be something as simple as asking questions during family dinners or car rides. The more you talk about money with your kids, the better their understanding will be as they grow. Also, talking about money won’t carry the same stigma it did for previous generations.

Stones and her husband make it a point to talk regularly about money with their kids. “We do not involve our kids in the actual planning of our budget,” says Stones, “but we do make it a point to speak to them often about our budget, the process of budgeting and how much things actually cost.”

Find Appropriate Areas of Your Budget to Discuss

Break down your budget and find areas that are okay to talk about with your kids. You’re probably not going to let your kids decide how much money you put into your retirement savings or investments. But you can let them help craft your weekly grocery budget or assist in choosing your next vacation destination.

Other budget categories where it may be appropriate to involve your kids include entertainment, dining out, travel, clothing, birthdays and Christmas spending, and streaming services.

Set Money Goals Together

Another great idea is to set money goals together. These can be family money goals—like a vacation fund or saving up for a large purchase for everyone—or money goals for them, like saving up for a toy or electronic device.

Setting savings goals can also be a lead-in to discussing the difference between saving intentionally and using your money for necessities like paying your mortgage and buying groceries.

“We have slowly started involving our almost seven-year-old in the family budget for the last six months, ” says Anika Jindal, founder of What Anika Says. “This has helped him understand the concept of needs and wants. He is able to understand the fact that we need to focus on the needs first and save money for our wants. So now, if he has to buy a toy, he is saving money for it from the money he gets after doing the weekly chores.”

Make It Visual

Both kids and adults can benefit from having visual reminders of their finances. Adults typically use spreadsheets, budgeting apps or a notepad to manage money, but why not create something for the whole family?

Draw (or purchase online) budgeting worksheets or coloring pages. You can hang them up on the fridge where everyone can see them. Then, color them in as you make progress toward your savings goals.

For example, if you are planning a Disney vacation, you can create a coloring page to represent how much you need to save for park tickets. Your kids will be engaged as they help color the worksheet, bringing them one step closer to a dream vacation.

Make Budgeting Experiential

If, like me, you have book-smart kids, one of the best ways they learn is through experience. Create budgeting experiences based on doing everyday activities. The thought of taking my kids to the grocery store when they were younger was scary. Our youngest was the best (and still is) at wearing us down until he got to buy something.

Taking your kids shopping, though, is an excellent way for them to see your family’s budget in action. Give them a budget and let them find items for meals for the week. Have them compare prices and then determine what you need and what you don’t.

Other experiences include trips to the bank, playing games like Monopoly and buying them a piggy bank. Don’t just talk about money with your kids. Let them experience scenarios where they can make money decisions, too.

Other Ways to Teach Kids About Personal Finance

Involving your kids in the family budget isn’t the only way to instill sound financial principles. Here are a few other ways to teach your kids about personal finance.

Open Up Savings Accounts for Your Kids

What better way to teach your kids about saving money than opening a savings account for your child? Many banks offer custodial accounts, giving your child limited access to the account while you oversee. Children’s savings accounts open up a world of learning opportunities, including saving toward money goals, learning about compound interest, how to deposit and withdraw money from a bank and more.

Let Your Kids Earn Money

I don’t know about you, but our kids hit my wife and me up for money all the time. Why not give your kids a chance to earn money instead of just handing it over?

It could be starting an entrepreneurial venture, like a lemonade stand or selling their old video games and toys. Many parents give their kids an allowance for performing weekly chores around the house. That’s something we’ve done with our kids since they were little. Our oldest daughter is in high school and has a part-time job. She’s been able to save money for when she attends college in the fall.

Many money lessons come into play when kids earn money. You can discuss how they want to use their money. If they get a real job, they’ll learn about taxes. You can also incorporate learning about savings, goal setting and managing a bank account using the money they earn.

Instill the Concept of Giving

Another financial lesson you can teach your kids is about giving to others. Talk to them about setting aside a portion of the money they earn to give to someone in need. This could be tithing to your local church, giving to a local charity or assisting a specific person. Donating money helps whoever is in need, but there’s also a joy that comes from helping others. Giving lets them see a world bigger than themselves.

Open Up Investment Accounts for Your Kids

We’ve already talked about opening a savings account. Did you know that you can also open investment accounts for your kids? There are several account options available, like 529s and IRAs. Your children may not necessarily be directly involved in contributing to them, but you’ll help your kids get a head start on their future through your investments now.

Bottom Line

As our kids grow and learn, we can use the time now to provide financial education at home that will better equip them for what lies ahead. The time and effort we invest in our kids now will pay off in their having a better understanding of how to manage money, avoid debt and save for their future. Plus, in providing these teachable moments for your children, you reinforce your own sound financial habits, including that most important habit of intentionally saving.

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