Never Say We Can’t Afford It

As my son grows older I’ve been thinking about how I want to teach him about money. One thing that came to mind was never to say, “We can’t afford it”. No, I’m not going to buy him everything he wants. I just feel that “we can’t afford it” is such a terrible answer. For instance, what would he think if I said we couldn’t afford his toy, but turn around and buy a new laptop for myself — he’d think that I lied.

A Better Way To Say No

What do you think is a better response? I don’t know the best answer, but I think either “We haven’t saved for it yet” or “We didn’t budget for it” are quite good. Either way, it would show your child that he (or she) can have whatever he wants as long as he saves for it, or budgets for it.

Of course, the next question will be “Why?” regardless of your answer. And I think both responses lend themselves more naturally to a constructive conversation about saving and budgeting. What a great opportunity for you to teach him how to save for what he wants! The budgeting conversation is bit tougher, however it is manageable. You don’t have to teach him how to work the spreadsheet or do any crazy calculation.

Teaching Your Child How To Budget

How to teach a young kid about budgeting? The simplest way I can think of is to give him a small allowance as his income and give him three envelopes to manage his expenses. Marked these envelopes as “Spend”, “Save”, and “Give”. Let him know that he can spend money from the Spend envelope for short-term expenses like snacks, drinks, lunch, etc. For more expensive things, he has to put money in the Save envelope until he has enough. Last but not least, shows him how he can help others by putting money in the Give envelope. Make it clear that once he puts it into the Give envelope, he can’t take it back out.

Let him know this is exactly how you’re doing it too. Tell him how you save money to buy big ticket items and how you donate to charity. This way he doesn’t feel that only he has to do it.

What would you saying the next time your child ask for something?

About the Author

By , on May 26, 2009
Pinyo
Pinyo is the owner of Moolanomy Personal Finance. He is a licensed Realtor specializing in residential homes in the Northern Virginia area. Over the past 20 years, Pinyo have enjoyed a diverse career as an investor, entrepreneur, business executive, educator, and financial literacy author.

Leave Your Comment (26 Comments)

  1. Jonathan says:

    Excellent observations. Children learn from those around them and sometimes the easier answer is one that misleads. I prefer your suggestion “We haven’t saved for it yet” I’m actually going to start using this response myself, as it’s got me thinking about that quite a bit :)

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