Young Americans Blog

Sara Says: Your Child Should Keep a Spending Journal

By: Sara Sankovich Published: September 8th, 2014

2014_Sara_Says_SpendingEconomists tend to think of people as rational and unemotional when dealing with money. As a parent, you know how difficult it can be to tell your child “no”. That can be emotional for you and your child, can’t it?

Even if you never deny your child’s wants (yeah, right), common sense tells us that we aren’t robots that mechanically budget money. We are humans and, as such, deal with emotions.

Unfortunately for your kids’ finances, children are completely ruled by their emotions. They don’t have the maturity or brain development to think the way a semi-rational adult does. Because of this, they tend to make financial decisions that provide instant gratification. I mean, every child needs that candy bar right now.

The great experiment

As a parent, you’re probably working hard to teach your child the difference between wants and needs. However, until your kiddo gets control of emotions, he or she will be under their power. To help combat those pesky feelings, have your child keep a spending journal.

Spending journals allow kids the opportunity to reflect on their purchases and analyze patterns. They can be difficult to maintain, so it’s important for you to stress the concept. When I explain this notion to kiddos, I relate the experience to being a scientist and collecting data for an experiment: The Spending Experiment.

Helpful tools

Like other things in life, there are tons of different ways to do this. One is for you to keep the log up to date and have a discussion with your child each week or month. Older kids can probably do this independently, however.

There are dozens of different formats to use, as well. One of my favorites was created by PBS Kids and is very easy to use. This wallet-sized version is perfect for teaching kids to record their purchases as they happen instead of waiting until they get home.

Some kids (and adults) are hesitant to start a journal because their intimidated by the idea of failure. I get questions like “What if I forget?” or “What if I lose it?” regularly. When I encounter these fears, I give kids a challenge: Do this for one month and, if you hate it, stop when the month is over. Youngsters are usually confident in their ability to do something for a month.

This sort of challenge provides an opportunity for a family activity, as well. If everyone in the household is participating, the child will feel supported. Plus, the family can have a great conversation at the end of the month.

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