The snow still may be piled high across much of the country, but hardy souls are starting to plan spring and summer vacations.
That means families have an easy opportunity to help their kids become financially savvy, by involving children in planning some of the spending aspects of the getaway.
Vacation planning has special advantages as a vehicle for teaching money smarts, according to Stuart Ritter, a senior financial planner at T. Rowe Price. "Parents can try to engage them in college planning and other things, but vacations are very real, very immediate things that they are interested in," he said.
Another advantage of using vacations to learn about money is that there are ways to involve kids with different levels of financial knowledge, Ritter said. Older children may participate in discussions of why a camping trip makes sense when college savings are important, and younger children can sort out small spending decisions.
"It can be like 'everybody gets $15 to spend on souvenirs,' or 'we can either eat out for dinner or eat out for breakfast and lunch,' " he said.
There should be plenty of leisure travel taking place this year: the Traveler Sentiment Index, published by the U.S. Travel Association and MMGY Global, is almost back to the heights of 2007, and an American Express survey found that 69 percent of Americans planned a summer vacation in 2013, up from 59 percent in 2012.
Laura Levine, president of the Jump$tart Coalition for Personal Financial Literacy, says vacations are a great opportunity to teach kids how to budget—on many levels.
"It's a closed end sort of activity with a definite start and finish," she said, so any less–than–great decisions or choices have limited ramifications.
One way to teach budgeting through travel, Levine says, is to get the entire family involved in the trip planning—deciding how elaborate a trip will be, and what that will mean for other things like college savings or holiday gifts.
Laura Landa and her family faced just such a decision last year. "We agreed as a family to have a 'smaller' Christmas this past year so that we could go to San Francisco to see the 49ers play their final home game at Candlestick Park," recalled Landa, who lives in Claremont, Calif. "The game was incredible and both kids said that they will never ever forget the excitement of that game or the fact that they were there."
Landa added that when they talk about what makes their family special, the kids often point to their vacations, partly because everyone helps shape them.
Levine says parents can also boost their kids' financial literacy by giving them some vacation money, and the freedom to decide what to do with it. On a vacation, kids can make money mistakes and the effects are not catastrophic.