Cutting back on expenses? Most families are.  

Asking children to share the burden of spending less is a reasonable course of action.  

If you've lost your job and cuts need to be made, it's reasonable to explain to children that the family will be making major cutbacks. The key is to reassure them that your family is safe, that you're in control of the family finances and that their basic needs will be met. Luxury items will be put on hold. 

Even if no one has lost a job, you can still communicate to your children that your family will be spending less each month, therefore, some of the privileges that they are used to having are being scaled back. 

In either case, your child is likely to have questions, "Will we lose our house?" "Are we poor now?" "Why can't I have these shoes?" 

Reassuring your children that their basic needs will be met is important. Pointing out that your family is a team and as a team each person has a contribution s/he can make on how to spend less money is a great way to approach the issue, too. 

When framed in a positive way this is an opportunity to teach your children how to save money and spend wisely which are critical life skills to have. Listed below are 10 practical solutions you can use with your kids. 

10 Tips for Teaching Kids to Spend Less: 

1)    Shop from a list. Before you go into any store, make a list of what you need. Don't stray from your list and donÕt let your children stray from their list. This is a key strategy for reducing impulse buying. It takes discipline and discipline is essential for reining in spending. When your child asks for an item while you're at a store ask: "Is it on our list?" If not, don't buy it.

2)    Do product comparisons. Before you and your children go shopping, have your child do some research on a product youÕll be buying.  My children wanted a bean bag chair for their tree house. They made a list of three stores and called each store to inquire about the size, color and cost of the chair.  Note: before the calls began we wrote a script for them to follow with proper phone etiquette.  Not only did they save money, they also learned about customer service. Online research can also be done.

3)    Clearance aisles. Most stores have a clearance area. Teach your children to shop there first.

4)    Make marketing strategies transparent. Point out that the expensive items are placed at eye level while the cheaper goods in a grocery store are on the bottom shelf. Show them how impulse items are displayed near the check out lane.

5)    Have a family meeting. At your family meeting, have a discussion about wants vs. needs. See what your children come up with. Then show them the reality. Teach your children about the cost of necessary items such as electricity, food, insurance and house payments. Budget money that can then be used for "wants" to contain unnecessary spending.

6)    Brainstorm ways to save money together. Kids are very creative. Let them use their creative juices on how to save money. For instance, you could brainstorm on how to save money on DVD rentals. Ideas might be: trading movies with other families; using the $1.00 kiosks at retailer outlets; and checking out DVDs at the library.

7)    Shop garage sales. Most kids love a treasure hunt. If you have items you need, have them scrounge through piles at garage sales. Or, have a garage sale yourself to make money and let the kids keep money from toys they contribute to the sale.

8)    Use coupon sites. Some popular sites are: http://www.coupons.com ; http://www.CurrentCodes.com http://www.couponmountain.com ; http://www.coolsavings.com;  http://www.retailmenot.com ; http://www.couponcabin.com. Give your kids half of the money saved from the coupons they find.

9)    Set limits on the number of times to eat out. Planning a weekly menu can help cut down these costs. Involve your children in menu planning and find ways for them to help cook the meal they selected.

10)Set a budget for kids' activities.  Most children are overscheduled. Take this opportunity to talk with your child about what cuts can be made and have your child prioritize the activities they want to do.

Helping your child to learn how to manage money wisely can save your family money in the short-term and can help them be wise consumers in the long-term.

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