Financial education begins at home. What's one way that you can teach your kids the importance of setting financial goals, saving money, and watching what they spend? By involving them in the process of creating your family's budget.
Budgeting as a family can help you and your kids get a better grasp on where your money goes each month and help your kids better understand the real cost of items. It can also help them learn how to set and reach financial goals.
As you work on making budgeting a family thing, think beyond the spreadsheet and find ways to bring your budget to life.
Set Financial Goals as a Family
One of the first things to do to get everyone in your household involved in the budgeting process is to work together to set some goals. You can set goals that will benefit everyone in your family, such as saving for a vacation and goals that will benefit people on the individual level, like saving for retirement, college, or purchasing a car.
In addition to setting specific goals, you can also chat with your spouse, children, and other family members about overall goals. Ask questions like, “Why are you making a budget in the first place? What do you hope to accomplish with it in the long run?” When your family has a clear understanding of the goals of the budget, they will be more likely to get on board with it.
Talk About Household Expenses & Ways to Save
Next, have a chat with everyone about household expenses. You don't have to bore your kids with talk of the mortgage or other fixed expenses. Instead, focus on expense categories that typically change from month to month, such as entertainment, groceries, utility bills, and transportation. If you’ve been keeping track of expenses, let your family see how much you have spent in each variable category over the past few months. If you haven’t been tracking your expenses, now is the perfect time to start. Give everyone a small notebook, or have them use a digital notepad in their phone, and ask them to record every purchase they make. Meet at the end of each week to chat and compare.
Once you have an idea of what your family is spending money on, it’s time to brainstorm ways to save. You might start using coupons or grocery store sales flyers to cut down on food costs. And if your family is used to getting take-out multiple times a week, look around online to find discounted offers for places you frequently order from. Encourage your family to get creative when it comes to finding ways to trim expenses.
Create a Visual to Track Progress
After you’ve set a family financial goal, track your progress. It could be fun to create a chart with $0 at one end and the amount of your savings goal at the other. As you set money aside for the goal, have your kids color in the chart, showing how far you’ve come. And if creating a chart doesn’t work, you can also try using an envelope system.
If your kids get an allowance, have them divide up their cash into envelopes based on how they hope to spend or save it. You can use envelopes to track household expenses, too. When it’s time to go shopping or make a purchase, ask your kids to check how much is in the envelope before you head to the store.
Another option is to set up a separate savings account to help your family achieve their goal. Setting up a You Name it Savings Account allows you to save for specific goals, like your family vacation or new car.
Celebrate the Milestones
Depending on the size of your family’s goal, it might be some time before you reach it. To keep your kids excited about achieving the goal, break it down into smaller milestones and celebrate when you reach each one. For example, if you’re trying to save $3,000 for a family vacation, celebrate every time you save another $500 by going for ice cream or rewarding them with their favorite treat. Celebrating milestones along the way will help you and your family stay motivated when it comes to your budget.
When it comes to budgeting your money and growing your savings, it’s easy to set up and meet a savings goal with Genisys! Check out our Money Fit video with your kids to get tips on budgeting so the whole family can achieve their financial goals.
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