7 Simple Ways to Keep Your Kids From Overspending – bankaroo :: virtual bank for kids (2024)

As you try to teach your kids about money, you’ll have to acknowledge to your kids that spending in itself is not necessarily bad. People need to spend money for food, for example. Keeping your children from spending too much, however, can be tricky, and many parents appreciate a few tips to stay on track.

1) Help your kids put their money in a savings account.

Kids tend to want instant gratification, which is something that’s a little ingrained due to the simple availability of so many immediately available products. When kids put their money in the bank in a savings account, however, they have to slow down a bit, because they need to go to an ATM or bank to withdraw funds. Money you are okay with them spending faster through debit cards or checks can go into a separate, non-savings account.

2) Enforce the 24-hour wait rule.

Often, again because of still-developing impulse control and rationalization ability, kids want to buy in the moment. Once they buy, they lose interest. If you encourage them to wait for at least 24 hours before spending on an item priced over x dollars, they’ll have time to think about whether they really want what they’re eyeing. The odds are pretty good that, at the end of the 24 hours, they’ll have changed their minds, and if they haven’t, they’re more likely to actually use what they spend their money on.

3) Have them use cash or prepaid debit cards.

Encouraging your kids to use cash whenever possible helps curb spending because the bills and coins are tangible and finite. They can visually see how much they have left to pace themselves, and once the money is gone, they can see that, too. Still, these days, plastic makes the world go round. Prepaid debit cards are a good alternative or step up from cash because, even though they limit the amount of money your child has access to, they offer some theft protection and allow children to work with electronic transactions, including those on the Internet you allow.

4) Encourage your children to go used.

Although there are of course times when new is best (underwear comes to mind), often, used items are more than fine. Your child can find everything from books to electronics at reduced prices if he is willing to go this route. You can point out here that the used option often allows people to buy more items or to save more money than if they only bought new.

5) Work with your children to set specific goals.

Kids are much more likely to toss their money at things if they don’t already have a focus for where the funds should be going. Have them set a goal to work toward, whether it’s buying the latest video game or purchasing some stock. You can help your child stay motivated by offering a bonus, such as matching funds saved, and by periodically going over their progress and praising them for improvements.

6) Use visual tools.

Kids are still developing their analysis and rationalization skills, and abstract reasoning is still being fine-tuned, too. Visual tools are a big help when you’re trying to keep spending under control for this reason. One method to try is to create a Take It Away chart or other project. For example, if your child has $10, you can use 10 magnets to make a money tower on the fridge. For each dollar he spends, you can take away a magnet. Some parents like to make pie charts or graphs with their kids to let them see how much they’ve spent and where the money is going.

7) Find other things to do.

Kids get on the computer, go to the mall and hit application-based games in part because they’ve got nothing better to do. If you can fill your kids’ day with other activities—say, a trip to the park or doing some basic science experiments in the kitchen—they won’t go to where all the products and advertisem*nts are. Subsequently, they won’t spend as much.