4 Ways to Save Money (with kids!)

Realistically speaking, children are expensive. Kids today want the latest electronics, clothes, shoes, and as they get older — their own car. {Try not to cringe about that last bit.  I can see the fear in your eyes through the computer screen.}

Part of teaching your kids responsibility is teaching them how to save money. If you’ve never been big on saving, now is a great time to start. You can teach your kids – and yourself – how to save up for items they want and need with the following tips.

Put Some Money Away Before and After You Spend It

Pay yourself first. When you get a little bit of money, put part of it away into savings. Try a small figure, like 10%. That means if your child receives a $20 bill, $2 goes into savings.

You can do the same thing with your paycheck. Take at least 10% and put it away every time you get paid. You’d be surprised how much that adds up. If you make $200 a week, and you put away 10%, you’ll have $1040 saved up in one year. Pretty impressive, right?

For the kids –> You can even save money after you make a purchase. One teenager made this suggestion to The Motley Fool, “When you buy something, only use dollar bills. If you buy a magazine for $3.25 and you pay for it with a $5 bill, you’ll get back $1.25 in change. Put the dollar back into your purse (or pocket) and keep the 75 cents separate. Only spend the bills, not the coins. Put all the coins in a jar for savings. That way you’ll always be saving a little.”

How much loose change do you carry around in your wallet, or have scattered around your house? Loose change is still money. Put it into your savings. Remember, every little bit helps.

Keep a Budget

We all can be vulnerable to compulsive buying. But kids seem more likely to want to buy new shoes, makeup, clothes, and general things on a whim. They often do not think much about price. They only know that they want it. If they have the money they’re going to buy it.

Train them to only buy what they need. You can lead by example. For starters, stay organized. If you know what you need beforehand, you’ll be less likely to waste money on unnecessary purchases.

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This brings us to your budget. If you don’t have one, set one up. A budget helps you to manage your finances. You’ll see what you spent and how much you spent every month. Budgets also help you control impulse buying. If you want something and it’s not in the budget, you’re going to think twice about it. You may be spending money earmarked for something else, which can throw you off financially.

Know Your Products

Here’s where we’ll get a little technical. Do you know the market habits of certain items? By that I mean do you know how often an item goes on sale, how long it lasts, etc? If you do, use that to your advantage.

If you don’t, find out. You can look up this information on the internet, or ask someone in the industry. You can save a ton of money if you just wait for things to go on sale.

Here’s the perfect example: Let’s say your kids are into video games. Most video games come out at $60. Some of them cost $80 or more depending on special/limited edition pricing. Your child may want that video game the day it comes out. So you put down $60 and pre-order it.

Alternately, you can wait. Most video games drop down to $40 on a sale within a few months of being released. If you wait six or more months, you’ll start seeing the prices go down to $30 or $20. In about a year, you may be able to catch that same game for under $15.

Most items are like that. Those news shoes your daughter wants? Wait a few weeks. They’ll go on sale, and you may be able to get them at a song, instead of paying full price for them.

Shop Carefully for Major Purchases

What about major purchases you actually need, like insurance? We all know how expensive that can be, especially with a family. Car insurance in particular can be extremely difficult to find at a reasonable price. In fact, AcceptanceInsurance says, “Finding cheap car insurance for young drivers isn’t easy…but it isn’t impossible.”

The key with major purchases isn’t really how much you can save, but the quality of what you’re getting. If a few dollars more will get you a better quality item, then by all means, spend it. If, however, you can get it that same item at the same quality for less, do it. This goes for anything major: insurance policies, braces, cars, electronics. You want to get your money’s worth out of your purchase; but, at the same time, don’t spend money needlessly.

Hopefully you learned a tip or two that you can pass on to your children. Teaching them to save money now will help them to be financially responsible when they’re adults.

What other money saving tips can you add to this list?