Vacation Tips: Creating spending budgets for your kids

Summer time is fast approaching, and along with it the mainstay of American family life – the summer vacation.  Whether you’re traveling or having a ‘staycation’, it’s easy to blow your budget with little extras.  You’re on vacation and you deserve it, right?  Well, at BYM we think the best vacation is one where one month later you’re not cringing when your credit card bill comes, and we’ll be posting tips throughout the next few months on making the most out of your dollar when traveling. first tip involves money and kids.  One of the best parts about a family vacation is seeing those little faces light up at all the great things that are happening.  But that can easily add hundreds of dollars on your total vacation expense, especially if you’re in a tourist spot like a theme park or a popular beach.  Keep control of your spending by setting a total budget for each kid on the vacation.  Be realistic here – if last year you charged up $20-$40 per day per child on candy, snacks, games, toys and souvenirs, don’t think you’re going to stick to $20 for the whole trip.  Set something reasonable that you can afford.

Once you’ve set a realistic budget, involve your kids in the spending decision.  The way we handle it in our family is to say “You have $40 for the weekend.  You can spend it on whatever you want, but when it’s gone, it’s gone and there will not be any more.  Have fun!”  You’ll love the peacefulness that comes from not having to grant or deny 50 requests every day from the “can I have this?” crew.  And you’ll be amazed at how much fun the kids have with the very grown up experience of making decisions.  You’ll also be surprised at how quickly the kids learn to be judicious with their money – much more judicious than they were when they were spending YOUR money!

If you have younger children, you should probably divide up the spending for them by giving them a daily limit, or even a before-lunch and after-lunch limit, otherwise they will blow all their money on the first day.  Younger kids don’t have a firm enough understanding of time, or of delayed gratification.  So break that $40 for the weekend into $20 on Saturday and $20 on Sunday.  It will be much easier for a young one to save up for a more expensive item by stashing some cash on Saturday then it will be for them to go all Sunday hearing “Sorry, you’ve already spent your money.”  (and it will be much more fun for you too).

If your kids have never had to make these kinds of financial decisions before, start before vacation so you’re not combining the excitement of the trip with trying to learn a new skill.  Take the kids to the mall, or a summer festival, and give them each a small amount of cash to buy whatever they want.  They’ll get the hang of it pretty quickly, and you’ll partner with them in their decision-making process instead of being the authority figure that decides whether they can have something or not.

If You Are New to Living Below Your Means: It will help your kids to see you going through the process of making tradeoffs yourself.  So let them see your own budgeting process, and set your own realistic limits on your spending for dining out, hotel, car rental, etc.  It will help keep you honest when you know you’ve spent enough for the day, but your credit card is right there tempting you to go over-budget.  It’s much harder to lie to yourself and say it’s OK to go over your budget ‘just this one last time’ when you know your kids are watching, and learning, from your actions.

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1 Response to “Vacation Tips: Creating spending budgets for your kids”

  1. Below Your Means Basics: 3 Principles for Budgeting & Tracking, Pt 2 | Below Your Means

    […] Give them a fixed spending amount for a family vacation. […]