More fun than it sounds: Using vacation to teach your kids about budgeting

We spent our summer vacation on Beaver Island, Michigan.  As one of our older friends put it: “It’s like traveling back to the 1950s.”  Of course, I pointed out that neither Judy nor I had lived in the 50s, so we weren’t sure what that meant exactly.

Beaver Island turned out to be a perfect choice for us.  Despite the Verizon coverage map (evidently created by an overly optimistic team member who had never actually checked cell coverage on the island), we found it difficult to find and maintain a signal.  This meant that I couldn’t use my cell phone as a wifi base for our laptop, the kids couldn’t text, and we weren’t able to send e-mail.  While we had fewer channels to choose from on the TV than we do at home, it did get the one that broadcasts “Locked up Abroad” – the basic gist is that if someone offers you a free vacation to an island in exchange for wearing shoes they provide, or agreeing to carry packages in your suitcase or in specially designed undergarments, you should refuse.  Otherwise you are about to become a drug runner and have a reasonable chance at getting caught and (hence the title) locked up abroad.

Sorry, I digress.  Before leaving home, I told Judy that I had a budget in mind for the trip and thought that if we could explain to our three children how I had arrived at that number and get their buy-in to stick to our budget, then I would love to give each of them a reward for helping us stay on target.  Part of the plan was to make them aware of how money gets spent and where it tends to disappear unnoticed during a trip.  So we sat our kids down, went over the budget, told them that if we stayed within it they would each receive a reward, and that if we went over budget it wouldn’t be the end of the world (we would pay our bills) – they just wouldn’t get the reward.

It seems to have worked.  Discussions about eating out and various activities took on a different tone as the family considered whether this was where we wanted to spend our money.  We still had a great time and at the end of the trip each child was excited to walk away with some cash.

I don’t want to take away the innocence and joy of being a child, but I do want our children to realize that our decisions have consequences and that budgets are not unlimited (at least outside of government).

What are some strategies you have used to teach your children the value of budgeting?

Technorati Tags: beaver island michigan,summer vacation,budgeting,reward