Talking to Kids about Frugality

Every parent has a story about how their child misunderstood something, in a comic, Three's Company, kind of way. “Cops come to accidents? Of course they'll come and get you if you wet your pants!” thinks the youngest son. And while that can make for hilarious stories, sometimes important messages, like those about money, can get mangled in transmission.
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When it comes to money, children may learn more from the actions we take than by the words we say. For parents working with a tight budget, whether in the short or long term, this can lead children to grow up with unwarranted concerns about money.  How can plan sponsors help parents prevent that? Context may be the answer.
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The first context to consider is what a child already knows about learning. Kid friendly frugality means kid familiar frugality. If parents are trying a new system, like paying only in cash for groceries or treats, let children understand it’s an experiment, not a problem or concern. Children play games at school to learn lessons, so they can easily understand that parents might play games or work experiments to learn too.  Since much of frugality can involve math, that means making the math fun as well. In this context, “child sized” means breaking information, or goals, into smaller chunks. The best approach may be to borrow from what children do at school and in other behavioral modification programs. Take advantage of the information parents get from their child’s teachers and use that to help plan any changes parents might make at home.
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Additional tips on making frugality kid friendly include using storytelling.  Some parenting advisors suggest telling the story of money in the parents’ household by starting with how its earned and by whom.
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Context is also crucial when understanding children’s perspective. Children run low on deferred gratification. Most children can’t put off a treat or reward now for greater rewards later. Understanding a child’s level of tolerance for delaying gratificationcan help parents decide how to shape what they tell their child, and how many treats they cut back on for them.  And don’t assume that a kid who has high delayed gratification will necessarily be a happier kid. The one who eats her chocolate Easter Bunny early and watches while her sister saves hers nearly to Fourth of July weekend might be the kid who enjoys the moment more and over all is happier with less. So the saver will understand that the parent may be cutting back on fun things now for a better house or to help Grandma more, but the live-in-the-moment kid may need a more moment to moment explanation.
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Finally, don’t lose sight of what frugality really means. For adults, being frugal means making considered choices and spending only when it supports a parent’s lifestyle and choices. Children may not understand the impact of disposable materials or cheaply made clothing, but they do understand concepts like sharing and friendliness. It may be helpful to think through a parent’s choices and plans for creating more frugality as both compassion to others (giving more to charity, or only purchasing items that will last longer and thus, won’t harm the environment as much), as well as self compassion. Most adults learned to prioritize spending and save money through their weekly allowances. If they wanted a special toy or record, they had to save some of each weekly allowance for it. Kids can learn the same with their allowances too, and relying on the idea of prioritizing rather than going without may help children take the right lessons from frugality.
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Some parenting experts suggest making these priorities concrete and everyday. That might include explaining why a parent might walk to the local library instead of driving, such as by saying so that they can have more money for the movies. Those experts suggest keeping the examples of “fun later” away from toys and food.  And speaking of the library, they also suggest making sharing clear when borrowing – either from the library or a friend – for books and clothes. Just as parents want to encourage their children to share toys at school, they can show how they benefit from their friends, and the community, sharing with them.

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