My favorite time of the year is here again! Amidst all the frenzy for the Christmas preparations, shopping for gifts and tidings, Christmas, a time for giving, friendship, we rejoice in celebration of this joyous occasion!
It’s a time of excitement and anticipation for every child. This is the time of the year when decision-making isn’t so difficult your 9 year old, waiting for this merry occasion to arrive and perhaps even before Christmas, the decision for what Mum would buy, would have already been decided.
The wish list seems to get longer and longer, the items larger and larger in value, when is it that enough is enough? How do you explain the budget that you have for each child during this Christmas? Can they understand why it’s important to choose an item within a budget? How involved are they about the budgets at home? Northwestern Mutual one points that, “Holidays are a good time to teach lessons in finance.”
Budgets are a proportion of our money that is available to us for specific purposes, it is critical in money management to teach our young their money on what they decide and choose to spend on. Why is it important? A budget sets the precedence for a few things,
- It teaches children to understand what can we afford in our family. Speaking to a Mom this Christmas we found her 10-year-old son contemplating how much he could spend on his Sister’s gift and how much he would apportion his savings to purchase gifts for the rest of the family. There and then, the notion of a budget was surfaced to him, explaining that he will have to spend within his means and decide how much he could afford to purchase in gifts for the entire list of family. Setting a budget enabled him to decide how much he would allocate to purchase meaningful and affordable gifts for each person at home without overspending and living within his means.
- Budgeting also sets the stage on how your child will possibly think about buying the next time he goes on a shopping trip. Budgeting is a process that gets the young one thinking, how can I afford what I want? More importantly, am I apportioning my money so that I can have a balanced goal in mind for healthy spending and saving? This will be timely for us to teach our young, to learn the decision making process behind how the young one makes choices.
The budgeting exercise teaches them to understand that we have to work within their budgets! What can your child do? Start a budget for the upcoming New Year! A way to start the new year with some budgeting goals in mind!