How do you raise a smart spender? Asking them not to spend won't do it because our kids will spend money. Everybody spends; there's no getting around it. Kids spend at the canteen, to pay for bus fare, at the shops, when they get birthday money. They will learn to spend very quickly. But how smartly they spend is up to us parents to motivate. 

One of the most important pillars of good money management is the art of smart spending. The better our kids get at it, the better they'll be at it. Teaching them how to make good spending decisions while they're young can make a big difference in how confidently they negotiate more complex spending as adults, such as when they're buying a car or a house. 

Here are five smart spending habits every parent should be teaching their kids.

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Question if they need it or if they want it?

One of the fundamental lessons in smart spending is teaching children to understand the difference between needs and wants. Needs are essential for their survival, such as food, shelter, and clothing, while wants are things they desire but can live without. Not every spend has to be a need, but encourage them to prioritise needs before indulging in wants; lunch is definitely more important than lollies. This will instil a sense of financial discipline and help them make informed decisions about their spending.

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Teach them the power of budgeting

If there's one skill you want your kids to learn, it's budgeting. Without a plan for how they manage their money, kids are just going to wing it. And before you know it, they'll be asking for more money. 

Teach your kids about budgeting by involving them in age-appropriate financial discussions. Show them how to create a simple plan by listing the money they have coming in, what they need to spend on and what they want to save for. Then show them how to track their expenses and review their budget regularly. And although things may not always go to plan, it'll help your kids make adjustments, learn from mistakes and make better money management decisions. 

Here’s 5 questions that’ll help teach your kids how to budget.

Help them save before spending

Saving is a good habit to encourage in kids, but not one they're likely to get super excited about unless you show them the possibilities. When kids want to buy something big or more expensive, help them make a plan to save and pay for it themselves. Whether it's for a toy, a gadget, or even long-term objectives like a college education, help them set savings goals and help them achieve their goals. Start with teaching them how to do a simple budget, allocate a portion of their allowance or earnings towards savings, and track their progress. By setting goals and saving regularly, they will learn patience and delayed gratification and have a plan for (some of) their spending. That's just smart.

Here are some ideas about how to make saving fun for your kids.

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Explain comparison shopping

Once your kids learn the art of comparison shopping, they'll learn how to make those pocket money dollars stretch a bit further. Show them how you research and compare prices, quality, and reviews before purchasing. And then help them do it a few times. Encourage them to look for sales, discounts, or alternative options. This habit will help them become smarter consumers who know how to get the best value for their money, avoiding impulsive purchases and unnecessary expenses.

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Delayed gratification

In a world filled with quick wins and instant gratification, teaching your children the value of self-control and patience is a powerful lesson. Delayed gratification will help them understand that waiting for something they really want can bring greater satisfaction than giving in to an instant rush. Encouraging them to save for bigger purchases will make them think twice about relying on loans or credit in the future. And help them make more thoughtful money decisions, avoid unnecessary debt, and appreciate the value of their hard-earned money.

Smart spending habits need to be taught from an early age. So kids can practice them under our guidance. So even if they make mistakes, we're here to help them make sense of it and do better next time. The lessons we impart today will shape their financial habits for a lifetime, so get started on those smart spending conversations today.

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