7 Ways to Build Sane and Sustainable Money Habits

When we stop to count how many of our actions each day are linked to money, and multiply that by 365, the number gets really big really fast. And therein lies the challenge:

Every year, we make thousands of money decisions, but if we, as parents, don’t have a values-based plan to help us stay on track, we risk not only falling short of our own goals, but also abdicating our responsibilities as role models to our kids and allowing the culture of consumption to fill that void.

Here are seven ways to help your kids build sane and sustainable money habits:

1. Discuss your money values

Smart money decisions begin with knowing what matters to you. Ask your family the following questions: What things matter most to us in life? Do our money choices reflect our values, not simply those of our peers? Have we invested the time it takes to examine what matters to us and then to determine ways to live in a manner that matches our values? Are there certain trade-offs that we need to make in order to achieve our goals?

2. Distinguish between needs and wants

We make thousands of spending decisions each year. Some purchases are truly needs, while others are clearly wants. Often this distinction, which appears to be so simple, is confusing, especially to kids. When your kids experience those “gotta have it now” moments, have a conversation about needs and wants and how your values influence whether you think of something as a need or a want.

3. Create a family gift-giving resolution

As a family, agree on a spending limit for all gift exchanges—for birthdays, holidays, and other special occasions. Discuss the value of gifts that you make for one another, as well as gifts of time spent together. Discuss also the value of gifts given to charity in your honor. Remind each other regularly why this resolution is important to you. Agree to keep this resolution for the next 12 months, after which you can review and modify it.

4. Create a back-to-school shopping plan next year

Involving your kids with this task can help them develop healthy money habits while minimizing what can be a very stressful experience for families. Be proactive with your kids and set up a time to determine a strategy. This is a great way to engage them in the process by transferring some accountability and responsibility to them. The most stressful part of the conversation will likely be agreeing on a budget. Discuss the amount that both you and your child are willing to contribute, then ask your child to list the items they would like and how much each costs. Help your kids think about ways to stretch the budget, like by buying things on sale or visiting used clothing stores.

5. Learn to earn

Encourage older kids to take on some type of summer work. Working and earning money helps teenagers understand the real value of a dollar. By earning their own money, they will better distinguish needs from wants. Holding part-time jobs also imparts lessons and rewards that will serve your teen through their lives. They will interact with people from a variety of different backgrounds and ages, and they will have to adhere to expectations of people outside of their family and peer group. This increases confidence, responsibility, and appreciation for the unique demands of working.

6. Inspire generosity

One simple way to involve your kids in sharing time, money, and material things is to give them a share check. Write out a check for an amount of money that you feel comfortable with, but leave the “pay to the order of” line blank. The idea is for your child to find a charitable organization that he or she feels passionate about. If possible, have your child give their share check in person. This will enhance their experience as well as give them a firsthand look at the charity they chose. With a share check, kids experience the personal rewards of sharing and the positive impact of generosity.