March 6, 2015
Family vacations produce memories for a lifetime, but they can also teach kids great money lessons they'll need as adults.
Involving kids in planning family vacations not only helps them appreciate the overall benefits of travel, but offers an opportunity for even the youngest kids to learn lessons about budgeting, saving and essential money management they will encounter every day.
If you have trouble tearing your kids away from their smartphones, you might be in luck. The technology kids use can be very effective in budgeting, pricing and planning travel. Surfing travel destinations can teach kids a great deal about what travel really costs.
The first step in planning the family vacation should be creating a budget for the trip. Set a realistic dollar limit for the trip and be prepared to discuss why that limit exists. For example, if there is a home renovation project scheduled that particular year, explain how that affects the overall family budget and the resources for the trip. It's an important lesson in balancing fun and family priorities.
After these limits are discussed, work with kids to create a detailed budget for accommodations, transportation, food, special event tickets and souvenirs, particularly souvenirs kids might buy for themselves. For tips, check out (http://practicalmoneyskills.com/travel) for saving on and this online calculator (http://practicalmoneyskills.com/travelcalculator) to help plan.
Once the budget is set, point kids in the direction of certain travel websites to start and let them bring back as much information as they can on potential locations and costs.
Putting the kids in charge of travel planning gives them an opportunity to learn about trade-offs. For example, a cross-country trip that involves substantial transportation costs might contain a valuable lesson in finding affordable accommodations. Depending on the age of the children doing the research and how much advance time is available to plan the trip, they can also learn how traveling in season and out of season might help the budget. Many peak summer destinations become significantly more affordable if a family chooses to travel over the winter holidays.
Above all, trip planning can teach an important lesson in spending and savings. If children want to buy souvenirs or treats on the trip, that's an opportunity to have them set aside part of their allowance or chore money to pay for their special purchases on the trip. To get them started, help them save for their goal using this online calculator (http://practicalmoneyskills.com/savingforagoal).
Finally, once everyone is home, parents and kids might find it useful to discuss how the vacation went overall and what improvements can be applied next time. Encourage kids to start researching next year's destinations immediately so the money and activity conversation can begin even earlier.
Bottom line: Involving your children in family vacation planning allows them to see the world and to practice good budgeting, saving and spending habits.
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This article is intended to provide general information and should not be considered health, legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.