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Family Budgeting--Teach Your Kids to Budget

written by: M Lambert•edited by: Jason C. Chavis•updated: 5/21/2010

If you are on a budget, your kids may be balking at the restrictions. One of the best ways to deal with this is to involve your kids in the budgeting process. Teaching your kids how to budget will help them to become financially successful adults.

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    Teach Kids to Budget

    As a parent one of the most important things you can teach your children is how to manage their money effectively. It is important to teach your kids how to budget. You can do this in several ways and start at a young age to teach them these important skills, as they grow older.

    One way to do this is to have your children earn an allowance or commission for chores around the house. With the money that they earn you may choose to have them purchase their clothes, toiletries and other things that they want. If this is a new process you may want to sit down and estimate together how much they will need in order to do this. Then you give them the set amount of money each month. The key is to let them run out of money, and to not bail them out. If they run out of lunch money, then they can take a lunch from home.

    Another important skill to teach is how to shop using sales and coupons. You can teach this by having your kids help to plan out a monthly or weekly menu. Then you can take them shopping with you, and allow them to shop comparing brands, and finding the right price. When you do this you should set a limit on how much they can spend on the weekly grocery trip.

    Another important skill to teach your children is to save up for more expensive wants. This is an important budgeting skill because it will teach them how to avoid debt. You can do this by setting incentive opportunities for them. For example you may agree to pay for half of their car if they will save up for the other half. This would work for things such as iPods or a laptop or anything that they want.