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Family Money Management

An icon of a man, woman, and child next to an open hand with a coin above it

If you’re expecting another article on creating a budget, you’re in for something more.  Managing a budget is about adapting your lifestyle to meet your financial goals, but family money management goes much deeper than that. If you’re reading this, it’s likely that you have a family, and with kids involved, every financial decision becomes more complex. This resource will help you find ways to cut costs on essential necessities, how to talk to kids about money, and provide ideas for how your kids can earn their own money while still being supported within the safety of your family.

Keeping Costs Low as a Growing Family

Creating a budget for managing the cost of a growing family can help you stay on track with your savings goals, paying off debt, not overspending on your little humans, and more. As your family continues to grow, so too will you need for things. While there are so many purchases you need to make to keep your family thriving, there are cost-effective ways to meet those needs. Check out these tips to help you save while providing for your family.

Purchase secondhand clothes. Kids outgrow their clothes so quickly. Buying clothes at a secondhand or resale store like Once Upon a Child or Sproutfitter’s can save you hundreds a year on clothing purchases. Sometimes, you’ll even find an item or two with new tags on them! Unless you’re saving their small clothes for a younger sibling (or just throwing them away because of the holes and stains), you can sell your outgrown clothing to these stores too.

Buy gently used items. Just like their clothes, kids grow out of car seats, sports equipment, and toys quickly. Before buying a replacement brand new, see if you can find one on Facebook Marketplace for a lower price. If you have local mom friends in the area, see if you can swap some outgrown or unused kid items too.

Reevaluating your housing. Many families start to look for a larger home as the family grows. Before packing up and moving to a larger home, consider making upgrades to your current home first. If you have an unfinished basement, you can finish it and add extra bedrooms, an office, or a living space to grow into. Or you can use those upgrades to increase the value of your home and sell it for a higher price. Then you’ll have a higher budget for your next home. Opening a Home Equity Loan with Alltru makes it easy to borrow money from the equity of your home to make the updates you need.

Meal prep. By planning out your meals several days in advance, you’ll discover that you can use ingredients you already have or plan to buy for another recipe more than once. By using the same ingredients across meals, you can cut your grocery bill and avoid throwing away wasted food. Plus, you can buy in bulk to save on buying several of the same ingredients. Since you’re planning ahead, you might find yourself in a drive-through line less often too.

Plan low-cost activities. Keeping your kids occupied or entertained can be expensive. There are several low-cost and free activities around St. Louis that can fill your days with fun. Several recreation centers in the area offer discounts to residents too. If you’re spending the day with friends, they might even know of other low-cost activities to try together.

Don’t pay for babysitters. It seems that every parent with an early teen is willing to have them babysit your kids. While family-friend teenagers usually aren’t that expensive to hire for a few hours, there are even cheaper alternatives. Take turns watching the kids with your friends that have kids. Maybe you will watch your friend’s kids this Friday and they watch your kids next Friday. This can save you hundreds of dollars over time!

Having Open Conversations about Money with Your Kids

Kids are often more observant than we realize, picking up on our habits or things we say without us even trying to teach them. This can be a good thing if they copy our good habits. Or it could be a bad thing if they model our negative habits instead. Having conversations about your money with kids can be tough, even if you practice great financial habits. A lot of parents just don’t know where to start when talking about money with their kids. Whether you’re financially struggling or living comfortably, here are some tips to help you talk to your kids about money.

Money Conversations about a Negative Situation

Remember, it’s your money. The most important thing to remember before you have any conversation is that you are in control of your money. It can be hard to see a way out when you’re struggling, especially if you’re dealing with the aftermath of a series of unfortunate events or the consequences of past financial decisions. However, overcoming this challenge is possible because you have control over how you spend your money. You are the one who gets to decide how to plan and work your way out of this situation, which is empowering since you are the one earning your income.

Plan it out. Before you sit down with your kids to talk about money, plan what you are going to tell them. Your kids don’t need the burden of knowing how much money you make and how much your bills cost. Don’t plan on telling them how you’re spending every penny in your account. Instead, determine how much you can share with them about your current situation. That way, you won’t blurt out something they don’t need to know.

Be honest. While you don’t need to share every detail of your situation for your and their sake, be honest if you’ve made mistakes. Many parents are unwilling to be honest about their finances with their kids. This can lead to so much distrust that it may take a long time to try to earn it back. Being honest with your kids can prove to them that they can come to you and be honest.

Reassure their safety. As a parent, you try your best to protect your kids. Part of even having this conversation is acknowledging that you are changing your behavior or making certain decisions to ensure your family’s safety. Reinforce the truth that their needs are being met, even though it may be difficult to understand in the moment. If situations result in you not being able to buy some wants, tell them that the money is going to be used for saving instead of spending. This is a safe way of saying that you can’t afford something without creating an environment of instability.

Allow room for questions. Your kids may handle the conversion well, accept what they’ve been told, and move on with their everyday life. If they have questions, create a safe space for them to ask questions. Kids are just curious and want to know the “why” to everything. This is likely a new situation for them. Make sure to answer their questions in an age-appropriate way.

Money Conversations about a Positive Situation

On the other hand, you could be financially comfortable and want to share the reality of your situation with your kids. If this is you, follow these tips to have a healthy conversation with your kids.

Plan out your conversation. Knowing what you want to tell your kids before you talk to them is a key step in having a healthy conversation about money. Most of us don’t have financial advisors that help us build our net worth. But if you do, keep the conversation basic so your kids don’t get overwhelmed with the details.

Be honest. While you don’t need to over share all of the details of your situation be honest if you’ve made mistakes. Many parents are unwilling to be honest about their finances with their kids. This can lead to so much distrust that it may take a long time to try to earn it back. Being honest with your kids can prove to them that they can come to you and be honest.

Remember to be humble. While financial stability is comfortable, it likely took a few months or years of more uncomfortable situations to get where you are today. Share about the sacrifices you’ve made along the way to get to where you are in a way that doesn’t put blame on your kids. At the end of the day, you are responsible for your own actions now and the decisions you’ve made to get to this point. Keeping an attitude of humility models to your kids how they should behave too. It’s important that your kids practice humility too so they don’t look down upon their peers who may be in a different family financial situation.

Make room for questions. Curiosity is a great trait about kids. Their willingness to ask questions allows them to learn. Since you’re in a great place financially, allow your kids to ask questions so they can learn from your successes and failures. As they grow in their understanding of money management, they can reflect on what did and didn’t work for you and make their own wise decisions.

Giving an Allowance

As you teach the basics of money to your kids, there are three concepts to introduce: spending, saving, and sharing. Spending is when they use their money to buy something for themselves. Saving is putting money in their account at the credit union so they can buy something more expensive later. Sharing is giving money to a non-profit organization or another person directly or through a material gift. Implementing an allowance system in your home can help kids understand how these concepts work in a safe environment. Check out these allowance methods to determine how you can start in your own home.

Award completing chores. Having kids complete chores around the house is a common way to have them earn an allowance. Determine what rules your family will follow so your kids know when they will and won’t receive an allowance. Some may be concerned that this will create a bad mentality of being rewarded for chores they should do anyway. If you think this may be true for your kids, create a list of chores that they are expected to complete anyway, and chores that they can do to earn their allowance.

Reward acts of kindness. If your kids go above and beyond the expected, choose to reward these situations as you see fit. This can help your kids be on the lookout for ways to help others. Chances are, the person receiving the act of kindness will be thankful for the good deed, regardless of a slight monetary reward your kids receive from you for doing so.

Offer a loan. As your kids grow in their understanding of money, you can operate as a lender to your kids in certain circumstances. Essentially, your child is “taking out a loan” with you to receive money in advance in exchange for bonus chores completed later. These bonus chores help to teach the concept of interest. They might discover they want to only use the money they have instead of taking out a loan with you – or even a real credit union in the future.

Give points instead. By giving your kids allowance points instead of money for their allowance, this can help them cash in their points later for real money. This is a great method for the kids who tend to earn and burn. Creating goals will help your kids stay motivated to earn their allowance, even if they won’t receive a tangible reward for a few weeks or months. Creating a chart to track their progress is great for visual learners who need reassurance that they are on track to hit their goals.

Kids Can Earn Money Too

Whether it’s holiday break, summer break, or some other season where the kids are less busy, they have a lot more time on their hands than you. Even with soccer practice and band concerts, they may still have some spare time. Encouraging your kids to do some chores for others to earn a little money can teach them the rewards of hard work. To clarify, this is not an allowance they earn from you. These ideas are for them to take outside the house to take to the community. Here are some ideas for your kids to take beyond your house and into the community to earn some extra cash.

Host a yard sale. There’s no better way to clean some junk out of your house than earning an incentive for doing so. Many subdivisions schedule yard sales a few times a year, so the entire community can take part. A yard sale is a great way for your kids to get rid of toys they don’t play with anymore. Plus, you can sell some items that you don’t need too.

Offer to do yard work. Giving your kids snow shovels in the winter is a great way for them to clear driveways for your neighbors in exchange for a few dollars. In the fall, they can rake leaves instead. When spring comes again, they can regularly mow lawns to earn some money for several months at a time.

Dog sit for friends. If your kids are used to caring for a pet already, they may feel comfortable dog sitting for family friends’ pets. While they could offer to watch dogs from unfamiliar neighbors, it is probably best that they only watch pets they know. A bite from an unfamiliar pet can cause a lot of issues that aren’t worth the money.

Wash cars. Washing cars by hand can be a fun way for your kids to stay cool during the summer while earning some money. Since cars are expensive, supervising your kids while they clean is a good idea.

Run a lemonade stand. The hot summers of St. Louis are ideal conditions for cool lemonade. Making lemonade isn’t expensive. Plus, neighbors love supporting cute kids selling cold refreshments. Even though this won’t bring in a lot of money, your kids will learn how to manage money as they serve customers.

Tutor younger kids. If your preteen excels in a subject in school, they can offer to tutor struggling students for a low cost. Tutoring younger kids is pretty easy to fit into their schedules too since many parents make schoolwork a priority for their kids, especially when they are struggling in a subject or two. Plus, it will keep them sharp during school breaks.

Conclusion

Managing money wisely really is a family affair. If you practice good financial habits, it’ll be easier to teach these to your kids. Whether you’re working through financial struggles or growing your net worth, learning how to have conversations about money with your kids is key. Knowing how to communicate about your successes and failures can help you teach your kids how to handle their own money. Although their earnings may come from completing simple tasks around the neighborhood or chores, the lessons they learn from managing small amounts of money when they are young can influence how they view and manage money later in life.

If you need help making financial decisions for your family, come to the experts at Alltru. We’re here for you.


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