Family Money Talks: Utility Bill Challenge

Don‘t you wish you learned about money when you were a child? I do! The majority of us have experienced at least one costly, stressful financial mistake in our lifetimes. Although many of us had to learn our personal finance lessons at the school of hard knocks, we can make our children‘s lives easier and more rewarding.

The Family Money Talks series provides simple strategies for parents to share with their kids that will motivate them to save money, build good credit, avoid debt and start investing young so they can achieve a state of financial wellness.

This month’s Family Savings Challenge activity will help your children develop essential money management skills, including: financial goal setting, understanding living costs and financial responsibility.

Step 1: Review household utility bills with your child.

Review usage-based utility bills. Electric, gas and water make good choices for this activity. Discuss what the bill covers and how it impacts your overall budget. For example, if talking about the electric bill point out all the items that use electricity and how contributes to the household expense.

Step 2: Set a savings goal.

Choose one of your utility expenses that you want to reduce. Look at the amount you spent on this bill last year during the same time and write down a realistic goal to reduce this expense. Be sure to lists the exact amount and time frame to reach your savings goal. Lastly, decide on a reward you can enjoy together if you successfully reduce the bill by your goal amount.

Step 3: Create a visual.

Cash stored in clear containers makes a great learning tool and visual reminder of your goal. Label the jars ‘goal’ and ‘success’. Put the cash equivalent of the amount you want to save the ‘goal’ jar. As you make progress towards you goal, move the money from your ‘goal’ jar to your ‘success’ jar.

Step 4: Develop a clear plan.

Create a detailed plan on how the members of your family can contribute to reaching your savings goal. For instance, if your plan is to reduce the electric bill make a list of actions you can take – anything from changing light bulbs to turning off electronics would fit for this scenario.

Step 5: Work toward the goal & monitor progress.

Together with your child, review the bill each month and discuss your progress. Adjust your plan if necessary to stay on course with your original goal.

Step 6: Celebrate and reflect.

When you reach your target goal have a discussion on the lessons they learned from this activity. Then celebrate together and enjoy some fun with the family!