How do small cuts in your family budget affect your kids?

When my children were younger I used to take them on errands with me and then give in to all those little demands for small items... A few small items per child per week really adds up!

Then, a couple of years back, we started giving the kids a small allowance. They each get $12 or less (my 4 year old and 2 year old are usually content with less, a typical total is around $20) and the key is they only get this once a month. This means they have enough to get a new Lego or a Barbie at a store, or even more from a consignment store or yard sale,  and they really look forward to allowance day!

It doesn't sound like a money-saving tip, but compared to numerous random small toy purchases throughout the month, it does lead to great savings.

We are very firm about buying them toys otherwise, and if they ask we can say "You already spent your allowance for this month, you'll have to wait until next time". Even my 2 year old understands this concept. Now that they are used to the system, I don't even have to avoid taking them to the stores. They will ask if they can afford something with their allowance, and if I say no, they put it on their Christmas or Birthday list (which also allows me to blame Santa if they don't get it ;-) 

This habit is also very useful for teaching them the value of things. We often find ourselves saying something like"Careful not to break it, it's worth 100 allowances!".

Sophie

http://www.inzaburbs.com 

I plan our budget to eat out once a week. We had overstepped that amount last week and my 5 year old son wanted to eat out again. Since he loves to save his money, I told him if he wanted to spend $15 for all of us (with a coupon) :)  that I would gladly take him. He agreed. Afterwards he said, Wow, that cost alot of my money. Maybe we should just eat at home more. Mission Accomplished!

Letting your kids spend their own money more will keep them from thinking it just grows on trees!

One of my favorite values to teach my son right now is that you don't always need to get something that is brand new. We go to a weekly barn sale where all the kids toys are free and he gets to swap out a toy. It's a ministry that a local church has in our area. When I had my first baby shower I was shocked that someone brought a used gift. I am now so embarrased that it bothered me. It was all that person could afford and it was from their heart.

We need to teach our kids early that it's the thought that counts!

The Bargain Shopper Lady

http://www.bargainshopperlady.com ( http://www.bargainshopperlady.com/ )

My kids, ages 6 and 8, are fully aware of our current financial situation. 

Recently my husband's employer cut his pay, dropping his net pay well below the bare minimum we need to pay basic bills and food.  Knowing that this would be a long term problem, we made the decision for him to give notice and start his own small business in the same field.  Until he is able to build up a client base, we'll be struggling just to pay the basics.  We need our children's help to succeed.

So, the kids and I spent some time at our white board learning about various aspects of finances.  I explained what a debit card is and how it works,  what a credit card is and how it works, the difference between a debit and credit card, how bank loans work, the results of using credit, paying minimum payments, etc.  We pretty much covered it all.  I also explained how much debt we have and how tight our finances are and enlisted their help in saving money. 

My kids have taken all of this information well.  They have accepted the big changes that we have made, in part, because they understand just how much money was being spent and the consequences of continuing on that way.  They also know that I can cook just as well as our favorite restaurants and treat them to many fun, free, outings.  They aren't feeling poor because our resourcefulness allows us to live well on very little discretionary money.  They volunteer money saving ideas that they come up with on their own.  They've been great troopers! 

They did ask if they need to be worried.  I told them, "No, you do not need to be worried.  That is a job for the parents only.  We will make sure we are all taken care of and get what we need."  

If anything, my kids have become more thankful for the blessings we have now that they really understand financial matters.

JoAnn ( http://www.mylivesignature.com/ ) @ HomeschoolDistractions.com

Excellent post!

My kids are old enough to understand and we've always been pretty straight forward with them in regards to not spending frivolously, but we try not to scare them or bombard them with images of the stock market crashing.

The stress of our economy takes enough of a toll on families and in fact, there have been studies done about how the trickle down affect of troubling times makes a difference in how people parent. So we make little changes here and there, we take a big deep breath and try not to transfer our financial stress onto our children.

Stop Screaming I'm Driving! ( http://stopscreamingimdriving.com )

We go out to eat less.  And our kids are really too small to notice.

Our kids are too young to really see the impact that the economy is having on our family, on them.  Our son with special needs may in the future find a curiousity about the change in his routine ( http://generalhysteria.blogspot.com/2008/10/how-ec... ) but we are truly trying to keep this from happening. 

Although, maybe I don't give them enough credit.  We don't give them as many choices on what they're going to eat in any one meal and it kills me to see any amount of food wasted... so they may start wondering why Mommy is gaining so much weight. We don't go out to eat as much and they don't get extra toys in the store for no good reason either.  All of our other expenses are fairly fixed and/or absolutely necessary (water, etc).  We hope that this economy doesn't effect our family any more than this.

~Mia.

My blog is General Hysteria ( http://www.generalhysteria.blogspot.com/ )~