How would you define spending?It is important to understand that there is nothing wrong with spending money, but it is also important to think about how you spend it. Consider the following three general rules before rushing off to spend your money. 1: Despite what advertising screams at you, you really don’t have to buy anything! Shocking? No, not really. With determination, you can learn to tell the difference between your needs, your wants, and your desires. Stop for a minute and think of something you’re planning to buy - which category does it fit? Train yourself to prioritise, concentrating on your needs first.
2: When the time comes to spend your money, do so wisely. In other words, choose ‘worthwhile’ items and make sure you are getting good value (a good price for a good product).
3: Learn to hold back - don’t spend everything you have straight away. You can plan to spend a certain amount and then stick to your plan. The first part is relatively simple, but it’s only too easy to get carried away. Nevertheless it can be done! Successful bidders at auctions operate this way. They won’t bid above a price they have decided upon before the bidding starts, even if it means losing the item they wanted.
Please let us have your feedback - do you agree with the three general rules? Would you add others? How would you define ‘wise’ spending?
Application: - It’s all very well to say ‘you can learn to’ but how does it work in practice? The first thing to say is that there is no ‘quick fix’. Principles need to be modelled and discussed by parents with their children over time. Put simply, the long-term goal is to discourage foolish spending and encourage wise spending.
1: Money you spend on your children should be clearly separated from money they spend on themselves. If this is understood, when they finish spending theirs, they will learn that there is no more to come from you. (Obviously if they do come to you, it is important that you don’t ‘give in’!) It is easy to define this separation. Spending ideas that come from your child come from their money. ‘Spending-on-them’ ideas that come from you will cost you. Don’t waver when you hear the words, "I want..." or "Please would you get me..." Your answer should be, "If you want that, you can buy it with your own money. If you don’t have enough, wait until you’ve saved enough to buy it." When this lesson is understood, you will find the requests decrease! Important Note: This rule applies mainly to whims, impulse items, and requests that come when you're out shopping. It's not meant to discourage balanced conversations at home about the things our children need or would like to have. Communication is a key - before you leave the house, demonstrate your discipline in planning expenditure. Let your children know what spending decisions have been made, especially including any plans you have for treats. Then make sure you stick to it without wavering. It won’t help anyone if you give in to an impulse buy yourself! One positive effect of this is that they will be much easier to take shopping. They know what and when to expect, and can look forward to it.
2: Children should be allowed to spend their money in the way they want, within some broad guidelines. These will vary from one household to another, usually around dietary and content considerations. Even the rules can be applied in such a way that children understand that you are not trying to censor their spending, but rather are helping to guide their diets and guard their minds. Tell them this is an example of ‘wise’ spending.
3: We have mentioned the need to differentiate between needs, wants, and desires. These three words can help to make decisions on whether something is a wise purchase and help decide the level of expense for a purchase. Clothing is a need. But it can also be a want, or even a desire. Your son may need a pair of trainers that are of good quality and fit him well. He might want a pair of popular, stylish trainers that are a bit more expensive. Probably he desires the designer trainers with the name brand, which are on the cutting edge of fashion, and are really expensive. Normally, you wouldn’t expect your children to buy their own basic clothes. But let them know your budget for their clothes and then involve them in spending it. In the example above, if your son really wants the expensive trainers, he can supplement your money with his own. He will need to understand the implications of this decision - reduced or no spending money for a period.
4: Explain the shopping process to your children when you are out. Tell them your budget for particular items and show them how to compare prices and quality. Encourage them to voice opinions, come up with suggestions, and look for sales. 5: Follow the same procedure when your children are spending their own money. After a while they won’t need you to be there offering advice every time. 6: However hard it is, don’t rescue your children from the results of a bad purchase or overspending. Teach them how to correct the problem now and in the future, but allow them to feel the results of their decision. 7: Teach your children to be responsible for the things they have. For example, if your child constantly loses things, replace an item the first time, but explain that they will be responsible for replacing it if it goes missing again.8: The opposite of overspending is under spending. Any financial imbalance is wrong. If your child won’t spend and just wants to save, help them create and work through a spending plan.
Text only
