Money Management: A Family Affair

Oftentimes, there is one person in the family who handles the money – balancing the checkbook, paying the bills, providing allowances, etc. That job can be very stressful if that person does not have the support and understanding from every member of the family. Indeed, a healthy and open approach to money management is good for the entire family.

Set Goals Together

The most successful family budgets start with establishing goals. For example, if everyone agrees that the goal is to save for a vacation, developing that goal may make it easier to resist overspending on entertainment, shopping or dining out.

Goals need to be SMART:  Specific, Measurable, Attainable, Realistic and Timely.

Once the family agrees on a goal, post it in a place where the family can see it every day.  The refrigerator or a message board are good places. The idea is to encourage and inspire everyone to stay focused and on track.  Be creative by posting pictures of that vacation destination, and include attractions that the whole family will enjoy.

Involve Kids at a Young Agecounting-coins

Should you include children in the budgeting process? While your children may not need to know how much you earn, or how much your mortgage payment is, it is still important to teach them that money is necessary to provide for the needs and wants of the family.

A great way to teach young children about anything is through playing, and budgeting is no exception. There are all sorts of games available to help young children learn about money management and budgeting, from traditional board games to apps you can download on your phone for them to playReading books about money management written for young children is another fantastic idea. For many families, giving the children an allowance provides a great opportunity to teach about goal setting, making choices, consumerism, and of course budgeting.

Consider including your school-age child in the discussion of one budget category at first.  Select a category such as entertainment, and discuss choices that would help achieve or not achieve the family goal.

Teaching your children wise money management skills will give them a strong foundation to build upon. Too often, children are not taught these skills and are left to learn the hard way as adults — sometimes after making costly mistakes. We encourage you to teach your children wise money management, goal setting and budgeting. It may prove to be the greatest return on investment you will ever receive!

Article courtesy of GreenPath Financial Wellness.

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