Dear Dr. Debbie,
Due to a complex jumble of circumstances, our little family is experiencing a very limited income at present. We hope this will turn around in a few months, but in the meantime our children, ages 2, 4 and 7, will surely notice changes in groceries and family activities.
What is a good way to explain this situation to them and gain some cooperation?
Don’t miss last week’s column Slow start to kindergarten — Good Parenting
Actually, counting pennies is a tangible way for young children to understand basic concepts about money. Take this time to share financial lessons with your children that will help them participate in cutting costs and making the best of what they already have. While your 2-year-old may just be grasping the concept that “two” of anything means one in each hand, your 7-year-old is ready to learn about making hard choices for conservative spending when the budget is limited. There are things even a 4-year-old can do, such as keeping library books on a certain shelf to avoid fines. Pennies saved from coupon clipping for items the family regularly buys (a good pre-reading exercise) can be saved up for a good bargain.
Set a Budget
The grown-ups in the family need to set and stick to a general budget. If you have had a “rainy day fund” set aside, consider how much can be drawn from it at this time. If you haven’t done so already, calculate just how much money you have to work with until your current financial situation gets better. Good budgeting is a stress prevention strategy. (That’s the best thing you can do for your children!) It’s too late to consider how your money could have been better spent when you have no more to spend. Increase your confidence in your ability to pull through by taking control of a workable budget. Your attitude about your financial situation will set the tone for the children.
A periodic review, perhaps monthly, will help you assess whether the budget needs further tightening. Using an online spreadsheet you can estimate your monthly expenditures then enter the actual amounts as they are spent. This can help you see where you can trim spending beyond essentials. For example, eating out is more expensive than cooking at home. Come up with ways to conserve electricity that make sense (and save cents) for your family. Your children will soon learn by your calmly and consistently saying “no” to wasteful habits and impulsive spending that are not in the family budget at this time.
Sell it Off
One way to increase your spending power is to unload unneeded items. Your children can participate in gathering up toys, books and clothing they are no longer using and help you have a family yard sale. A community yard sale is a great way to pool advertising efforts and entice a wider customer crowd. Your children will also see that other families use unwanted items to gain some cash which normalizes your family’s actions. Setting a percentage of your proceeds for your family to spend at the sale is a good example of economic stimulus, too. Community websites as well as sites like eBay and Craigslist are also useful for liquidating household items that may be of value to another household.
Trade in Circles
Children’s clothing and other quickly passed through items can get extended mileage going from one family to another. You may have friends, relatives, neighbors or workmates who would appreciate being in line for passing and receiving gently used things. By the way, this is an important lesson for your children for saving the planet – why waste resources to make new products when one family can make use of something another family is finished with?
Buy it Used
There are secondhand stores and websites for a wide variety of purchases from toys to cars. Bargains can be had at other people’s yard sales and website postings. As long as your household includes children, you might as well get furniture that you don’t have to worry about since it comes with its own scratches and other gently used markings. The same goes for bicycles, musical instruments and even swing sets. When you share with your children the logic that used items are far below the original price — they gain another economics lesson.
A 7-year-old can be brought into your comparison shopping research, whether for groceries or a family outing. Grocery coupons can add up to several dollars or more each week. Park admission may be $6 per car compared to a $30 trip to a movie matinee. At the same time, a walk to a local playground is free. While the math will be over the head of the younger children, they will benefit from your model of spending time to be sure that money is spent as wisely as possible.
Expert buyers might price watch for a week or even months, for something like an electric appliance before making a purchase. The Federal Trade Commission further recommends checking the fine print on ads and in-store signs to see if exchanges or refunds are available.
Enjoy What’s Free
The best lesson your children can get from your watchful spending habits is that there are plenty of things your family can do for free. In fact, activities right at home not only cost you nothing, they can actually be investments. For example, teach your 7-year-old how to thread a needle to help you restitch a torn seam. Show the 4-year-old how to turn a screwdriver to put a screw back in place. Your 2-year-old will probably love scrubbing some plastic or rubber toys — either in a sink or the bathtub. You are spending time wisely when you take care of what you already have.
You can also check ChesapeakeFamily.com each month for a list of free activities in the area with options great for kids of all ages.
Deborah Wood is a child development specialist in Annapolis. She has a doctorate in Human Development from the University of Maryland at College Park and is founding director of the Chesapeake Children’s Museum. Long-time fans and new readers can find many of her “Understanding Children” columns archived on the Chesapeake Family Magazine website. You can find her online at drdebbiewood.com.
What do you think? Leave your thoughts in the comments or submit a question to Dr. Debbie at Betsy[at]jecoannapolis.com.