There are many skills that will make up your child’s money smarts, and smart spending is one of the most important. It starts by helping them be aware of how much, where and on what they’re spending their pocket money. 

Kids will spend money. They’ll spend money on food and snacks, bus fare, events, when they’re out with friends, on toys and lollies, and even things you can’t fathom, like overpriced hydration drinks!

You can’t teach a child to be a smart spender by telling them not to spend their money. But you can teach them to be more mindful of where they’re dishing out their dollars. 

So what does teaching them to track their spending actually do:

It helps them learn to stay on budget

So you’ve helped your children do a little budget. Keeping track of where they’re spending will help them stay on top of their money plan. 

By keeping track of their expenses, they can compare their spending against money they have coming in (from pocket money, chores, etc.). They’ll be able to see if they’re spending according to their budget or if they need to make adjustments.  Knowing how much they’ve spent will help them understand how much more they can afford to spend without running out. And they’ll learn to make smarter decisions to avoid overspending. Somehow kids never seem to have a problem with oversaving!

These 5 questions can help you teach your child to budget.

They’ll start to understand the value of money

Tapping a card is easy. We may think digital money is invisible, but it’s not hard to show kids what happens after they tap. Make going through their transaction history a regular habit. Not only will help this help your kids see just how much things cost but also how small purchases can add up over time, and see the impact of their choices. 

It’ll help with their saving goals

Spend tracking enables kids to analyse their spending habits and make better money choices. And that includes thinking about when not to spend and to save it instead. So if they’re saving for something (or are planning to), being aware of how much they’re spending will help them plan their savings. They’ll learn to balance what they want to spend on now with something big they’re saving for in the future.  

Prioritising their spending and make choices that align with their goals will also give your kids the satisfaction of achieving their objectives, and reinforces the habit of saving.

Thinking of how to make savings more fun for your kids? Try these ideas.

It’ll build their confidence

Being aware of their spending habits helps kids make better money decisions. And the positive impact of those good decisions builds their self-esteem and confidence with money. It also puts them more in control of their finances, making them feel more independent and capable.

They’ll get better at maths

Spend tracking is a great way to level up their calculation skills. They’ll get better at adding, subtracting, calculating percentages, and comparing their actual spending against their budgets. It’s one of the most effective ways to put their numeracy skills to practice. 

It’ll make them more responsible 

Learning to track their spending helps kids develop a sense of responsibility for their financial choices. Managing money well and sticking to a budget requires a little bit of discipline, and getting them into the habit of reviewing their spending will help that along. 

Spending money is a part of life, and the smarter kids spend, the better they’ll learn to manage their money. Being mindful of how they spend helps kids learn about their own money behaviours, and it helps us parents guide and support them better.

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