Baby Steps to Raising Frugal Children

My name is Mindi and I am a Reformed Spoiled Brat. (HI Mindi!)

I grew up during the Reagan Years.  By the time I was 10 and realized that there was a whole world out there beyond my metal skates, it was 1980 and living to excess was all the rage.  At the same time, my mother and step-father were doing very well financially as was my father (who is a sucker for daughters).  I made it through my teenage years getting almost anything I wanted...a whole new wardrobe every season, the most wonderful stereo (with TWO cassette players AND a turntable), TV & phone for my room.....even a typewriter that had a one-line computer screen so you could preview your words before you hit return! (Good Lord I'm old!). 

Quite obviously, not the ideal conditions for learning frugalness.

Do I blame my parents for the Spend-A-Holic years that followed?  Nope!  Am I grateful for everything they gave me?  You betcha!  Am I doing things a little differently than my parents?  Yes (but Mom & Dad - if you're reading this - it's also because you guys had more money than we have....really...Love Ya!) 

So what are some steps that you can take to raise frugal children?

1.  Teach them that money comes from work.  My boys used to ask me why my husband had to go to work and couldn't stay home to play with them.  I told them that Daddy goes to work so that Mommy can stay home with them and so that we can buy chicken nuggets and ice cream (they're only 7 & 5....telling them that it is so we can buy asparagus is going to have them begging my husband to quit his job). 

2.  Restrict toy purchases to birthdays, holidays and "special days" (the lost tooth, the day he scored the only goal that won the soccer game, etc).  While I know that it is easier to silence the "BUT I WAAAAAANT A NEW POKEMON!" cries at Target with just grabbing the $5 toy, you are setting a dangerous precedent.  As they get older, their demands invariably get more expensive!  (and no - a Tuesday is not a "special day", unless your child discovered the cure for cancer that day!)

3.  Give them a small allowance so that they can save up for those extra toys.  Even if it is only a dollar a week.  Let them know that it is theirs to do with what they please, but if they spend it all on Hershey Bars, there will be no more until the following week.  Help them set goals by figuring out something that they want (the $5 Pokemon, the $30 DS game) and how long it will take them to save up for it. You can even help them to create their own "Emergency Fund" (you know - for the day that they find the toy that's been sold out forever!)

4.  Give them the opportunity to earn extra money through extra chores.  Note:  I said "extra chores".  I don't think kids should be paid for keeping their room clean or picking up their shoes (although your mileage may vary). Make them work for it.  I'm not talking about setting up your own little sweatshop, but you can give them age-appropriate chores.  Offer to give them a few extra dollars towards that new video game if they help Daddy rake the leaves

5.  Let them know what steps you are taking to save money.  My children know all about my couponing.  I usually take them to the grocery store with me (not exactly by choice) and we try to make it in to a game.  I will often give them a coupon for an item that we are buying and ask them to find it.  When I ask them to turn off their bedroom light when they leave the room, I let them know that the less money we spend on electricity means that we have more money for pizza. 

6.  Consider getting them Financial Peace for Children.  If you have gone through the program for adults, or simply understand the basics of Financial Peace, you can easily make up your own version.  I do like the Dave Ramsey version, but that's just me.  (note:  if you do buy it and you have more than one child, make sure that you get the "add-on kit" for your other children rather than a kit for each child!)

7.  Lead by example.  this should be obvious, but it isn't to many people.  While most moms that I know spend way more money on their children than themselves, don't buy yourself a whole bunch of toys (shoes, TVs, etc) if you are telling your kids that there is no money for cookies. 

What are some ways you are teaching your children to be frugal?