If we feel out of control, imagine how our kids feel. Abundance is all they have known since the day they were born. To help them (and you) survive and thrive in this new economy, here are some money savvy tips that will save more than a few pennies and teach kids how to live rich while spending less:

Shop with a list. Whether you are going to the mall or to the grocery store, it’s time to go back to shopping with a list. Buy only what is on the list. Have your kids make a list of what the want and what they need. “Needs” are always at the top of the list and “wants” don’t get purchased until “needs” are met.

Carry only cash. The best way to avoid spending more that you have is to use cash. Kids don’t understand credit until they learn that when money is gone, it is gone. So, only allow your kids to use cash. Set an example by using cash yourself. It is impossible to spend more than your have when you use cash.

Clean your closet. Kids need to be reminded of what they already have. They forget – and cleaning a closet reveals long ago treasures that can be used again rather than buying new.

Trade. Encourage kids to “trade” jeans and gently used clothing, sports and hobby equipment and other accessories with friends. Rather than a trip to the mall, host a “trading” party at your house. As the saying goes, your trash is my treasure!

Use the library. Remember that place — the one with all the books, videos and magazines for free? Have the kids peddle their bikes or take public transportation to the local library once a week to get all the entertainment they need for free.

Don’t eat out. Cook as a family. It’s fun and much cheaper than eating out. Kids learn how to make a meal and families have time together that won’t cost more than the time it takes to prepare and consume.

Turn off the lights. Even the youngest family member can get in the act with this tip. Assign younger children the job of making sure all lights are out in rooms when they are empty.

Start allowance. The best way to control your spending and your child’s spending is to start allowance. Sit down and talk about what expenses your child wants to manage and set allowance for that amount. Allowance teaches your child to budget. Allowance allows you as a parent to discover what is really important to your child. Children will spend our money all day long, but theirs will be spent only on what they truly want and need.

Get a job. Earning money today is a powerful way to help kids take personal responsibility for their spending.

Keep track of savings. It’s important to show kids what the money savvy tips do for the families’ bottom line. Estimate the savings and put a portion of the savings against family debt and another portion into a family account that can be used for treats, like an occasional meal out or trip to the movies.

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Susan Beacham
Written by Susan Beacham
Susan Beacham founded Money Savvy Generation in 1999 after almost two decades in private banking and investment management complemented by considerable time teaching at the elementary level.

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