Every time you go shopping with your kids, you have a chance to teach them about money. So take advantage of the real-life lessons the grocery store, gas pump, toy store, and mall have to offer.
“Parents can help kids learn good money skills that can help them become financially-responsible adults,” says Theresa Harezlak, a financial advisor with Savant Capital Management in Rockford, Ill. “You’re their greatest teacher.”
Here are three ways to use stores to develop your kid’s money sense.
1. Talk while you shop. When you go into a store with your kids, let them compare the cost of similar items. In the bread aisle, for example, point out that one loaf is $1.69 and another is $3.49.
“Ask your child, ‘What’s the difference between the two? Why do you think one costs so much more than the other?’ ” Harezlak says. Then discuss which one to choose and explain your reasoning about your final selection, such as: “Even though this bread is more expensive, it’s got more fiber, which is healthy and everyone likes it, so that’s why we’re going to buy this one. And since it’s on sale, we’re going to buy two loaves now and put them in the freezer for later.”
2. Give them a budget. Whether your give your kids an allowance or randomly give them money, let them spend it however they want, but don’t subsidize them. “If you give your kids $10 each to spend at Target, don’t fish for change if what they select costs $10.99,” says Harezlak.
Also, give your kids the choice: “You can spend your $10 today or you can hold off for another time.” Younger kids will often pick the $9.50 yo-yo just to leave the store with something. But eventually they’ll learn to delay instant gratification and save up for something special.
“I never thought my 13-year-old son would ever get it, but he does now,” says Harezlak, whose pattern is to occasionally give her 8-year-old and her 13-year-old sons $10 to spend as they wish instead of a regular allowance. “He banked enough to get a TV because that’s what he really wanted,” she says. And his little brother got a valuable lesson on what saving can get you, even though he’s not a saver yet.
3. Know you’re being watched. Your kids are tracking everything you say and do and logging it all in, so be careful how you deal with shopping when they’re around. For example, “If you’re constantly saying things like, ‘Oh, I really shouldn’t buy this, but it’s so cute,’ you’ll teach them that it’s OK to rationalize splurge purchases or buy things you don’t really need,” Harzelak says. So watch out. “Kids develop their money habits based on how their parents behave with it.”
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