1 large manila folder or file folder, about 12 smaller envelopes for receipts
Often children find that they have spent whatever money they have and really have little idea of where it went or why it went so quickly. It is important for them to see where their money has gone and to establish priorities for their spending and saving. Knowing where your money is going is one of the most important ways to take more control over how you use your money.
- Talk with your child about how much money they think they may have spent over the last month. Then, if you can, try and go over things they have spent money on and see if they are close in what their guess was.
- Next, talk with them about how they used their money—did they only do spending and, if so, what did they spend their money on? Were they able to save any? Did they do anything else with the money they had?
- Ask them whether they would do anything differently with their money if they could go back and have a chance to make their decisions over again.
- You can also take this opportunity to talk about goals—things they hope to have or be able to do in the future. Did they do anything over the month to move any closer to reaching any goal they have? To get the most from your money, it is important to know where it is going—and to make sure it is being used for the things you really care about.
- To help them learn more about getting a handle on where their money is going, show them the folder and envelopes. Tell them that an interesting way to track where their money is going is to save receipts for all the purchases they make in one month. Then, at the end of the month, they can review what they spent their money on. They will be able to get a sense as to where their money is going. Then they can decide whether or not they would like to try and change how they are using their money. It will be important to learn, when managing money, that the most important things should be taken care of first—before there is no money left.
- Have the child label the folder and jazz it up with a design etc. and then label the envelopes for month indicating the different categories of things they will use their money for. You can talk with your child and work out the different categories.
- Then, over the next month, ask them to put all their receipts or record of purchases in the appropriate envelope. At the end of the month, review with your child how they used their money and talk with them about whether they think they used their money wisely and, in the next month, would they want to do anything differently.
- Talk with your child about the difference between needs and wants.
FOLLOW UP IDEAS:
- Help them set one or more goals—and then help them set up a savings strategy so that they can save their money to reach a goal—perhaps a desired purchase—or a gift they want to buy for someone, or ….