Teaching children about money is one of the most important things parents can do for their children. After all, knowing how to shop responsibly is a life skill everyone should learn early. Here are some tips on how you can raise your toddler to become a smart shopper.

Introduce Budgeting

The first step is to teach your toddler the value of budgeting. It is important that your toddler understands that there is no endless supply of money, therefore, spending and saving should be balanced. For example, you can give him $5 as his weekly allowance. Make it clear how much money he has and to plan his spending wisely. This is the fastest way to make him weigh his options carefully.

Take Your Toddler Shopping

Sure, it is more stress-free to shop alone, but your toddler will learn more being with you. Before going to the store, make a list so you can focus on the items you need. Teach your toddler how to read labels. Compare prices. Explain that the brand-name cereal may have a cuter box but the store brand tastes just as good. Stress the importance of quality versus quantity. If you are in a clothing store, discuss why spending more for a good pair of jeans is better than buying 3 shorts for $10.

Use Cash

Your toddler will not be able to understand the true significance of money if he sees you using credits cards and checks all the time. Use cash whenever you can. Explain how credit cards, debit cards and checks work in words he can understand. Limit your own credit card use to your toddler from having credit card debts when he gets older.

Give Your Toddler A Job

You can get your toddler to do simple chores such as setting the dinner table, cleaning the floor or picking up falling leaves in your backyard. Give him money once he has completed his tasks. This gives him an idea that one has to work hard to earn money. Plus, buying things will be less alluring if he is spending his own money.

Avoid Impulse Buying

Impulse buying can lead to overspending. Help your toddler understand his needs and wants. If he wants to buy something, encourage him to plan ahead or sleep on it so he can decide if it is a want or a need, if he will really use it and if it is worth the price.

Teach Your Toddler How To Save

Explain to your toddler that if he wants to buy something, he has to save for it. He can allot a certain amount for a week or month for that robot. Help him collect coupons for future use and search for bargains. When he receives money for special occasions like his birthday, insist that he open a passbook account and have him deposit his monthly savings to his account.

Introduce The Value of Giving

Being a smart shopper is not just about learning how to save or score discounts, but it is also about knowing how to give. Giving helps your toddler learn that he can get satisfaction from money when he is able to help the less fortunate. Drop money to the local donation box. Volunteer in a soup kitchen. Ask him to pick toys and clothes he will no longer use and give them to charity.

Last but not the least, set a good example for your toddler. When your toddler sees you handling money maturely, he will most likely follow your act.