Are you planning a family vacation this winter? If so, it could be a great opportunity to involve your children in some basic financial planning, using their enthusiasm for vacation to teach them about budgeting, saving, and spending. Plus, with the cost of travel on the rise, you might even save some money in the process!
Here are a few easy ways to involve your kids—and help keep your vacation spending on track:
Ask them to help you map out a budget ahead of time. How much will you need for travel, lodging, meals, souvenirs, and entertainment? Older children may be able to help you prioritize expenditures in the overall budget, while younger kids could focus on a smaller area, such as setting a budget for souvenirs or a daily spending allowance.
Enlist them in saving for the trip. Try collecting money in a jar and tracking your progress on a whiteboard on the refrigerator. Older kids can save their own vacation spending money from their regular allowance, if they receive one.
Give them a daily vacation allowance. During the trip, give kids responsibility for their own expenses each day so they can learn from experience. Younger children might decide which souvenirs to purchase; older children may be able to take responsibility for buying their own meals, souvenirs, and snacks. Let their decisions be theirs, and avoid bailing them out if they run out of money before the end of the day. If they make a purchase they later regret, they'll be more likely to think carefully next time.
Acknowledge success. When younger children realize they can't afford the souvenir they really want and turn to a second choice, praise them for staying within their spending limit. Similarly, let older children know you value their efforts when they make their money last until the end of the day.
Consider setting up a post-vacation savings incentive plan. If your child returns from vacation with a portion of his or her spending allowance, consider contributing a certain percentage of the balance to help rebuild his or her savings.
By using some of these strategies (or creating your own), you can give your kids great vacation memories, as well as money lessons to last a lifetime.