As your child grows, their spending habits also grow. Their needs and wants change, and so does their expenditure. Children generally overspend when they are aware of the fact that their parents can afford it. But parents need to teach their kids about money and its importance. Now, don’t get us wrong; we do not mean to tell you that you should not be pampering your kids. After all, they are your sunshine. However, it is imperative to recognize your child’s spending limit and make them understand that overspending is not a good habit at all.
However, you also have to acknowledge the fact to yourself and your kids that spending in itself is not bad. Spending on necessary items like books, school supplies, food, a gift for a friend, etc. is an unavoidable expense.
4 steps you can take to keep down your child’s spending in check
1. Sit with them and plan a monthly budget
Implying a budget with set expenditures and revenues is an excellent way to restrain your child from overspending or spending on unnecessary things. Draft a monthly budget to specify how much they can spend, and make sure they do not go beyond the limit.
Planning and discussing with your child how much they can spend, helps them realize that they do not have money flowing. It gives them the idea of being responsible children who are financially independent, but not financially spoilt. This also helps them realize the value of money and encourages them to only spend on things they really need.
2. Discuss your child’s expenditure at the end of each month
As the month ends, discuss with your child how much they spent and on what. You can help them create a pocket money expense tracker to track where they spent their monthly allowance. This will help you realize how much they are spending and restrict their overspending behaviour. As you discuss, you also make the child learn how much they are actually spending in a month.
Usually, when a child spends on items on a daily basis, they do not realize how much it is worth in totality. Spending $5 every day might not look like a lot, but $1500 per month indeed does. This activity will help your child realise that they have been overspending, and this needs to change. Make your child understand that their monthly budget is supposed to be at a particular level and that overspending needs to stop. Managing pocket money properly will help kids to learn money management for the future and you can see the true benefits of giving pocket money to kids
3. Wait It Out
This rule works for most of us, and not just children. Often, we lose out on our self-control and make impulsive decisions. This leads to us buying or spending on things that we do not really need, but are fascinated to own. Once we get hold of them, we lose interest. The same exact thing happens with children, and to a greater extent. They are lured to buy something just because they want to, without any apparent reason why. As soon as they get it, they do not need it anymore. This is one of the prominent causes of overspending in kids.
Encourage your kids to wait for at least 24 hours after they see a product, in order to buy it. If they are still interested in purchasing the product after an entire day, revisit the decision. If they change their mind about getting the item, the trick worked! If not, it is most likely that they really need that item and will use it in the long run.
4. Indulge Your Children in a Hobby
Kids mostly hop on to go to the mall or a nearby café to spend the spare time they have in hand. Find them exciting hobbies that will keep them entertained. This will enable them to spend time on better things rather than just going out and spending.
Plan a trip to the park, an adventure island, or do some crazy-fun science experiments at home. This will not only expand their knowledge base but keep them occupied as well. You can also get them enrolled in a dance class, singing class, or painting class according to their preference. Help them realize their hobby and invest time in it. This also helps in a child’s mindfulness and an elevated creative sense. They will learn to socialize there and enhance their skills. As a result, they would not spend as much in the mall or the gaming centre.
These were a few tips and tricks that parents might want to know who worry that their kids are overspending. Most of these tricks help the child realize the value of money and how hard their parents work for it. It helps them understand that they cannot just spend whatever amount they want on whatever item they like. Instead, it restricts the kids’ spending to the most important and essential things. This refrains the kids from overspending. It solves half of the problems that parents have to deal with when their kids are growing up, without having their kids argue with them. Of course, every kid likes to own the latest gadgets and toys, but what we, as parents, need to make them understand is that earning money is not easy, and so we shall all spend it wisely!
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