Teach Your Child How To Create A Budget
Teaching your child to work with a budget at an early age pays dividends in the long run. Even when they are young, children are capable of understanding the basic ideas of working with a budget. Here are a few great ways to teach your kids the importance of budgeting and how to create one.
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Set aside some time to work with your child. Gather some note paper, pencils and a calculator. Then use these tips to get started.
- Guide your child, but don’t do the work for them. Let them work through this task on their own. Learning to budget is an invaluable skill. If you make the decisions about where and how they spend their money, they’ll never learn how to make smart money decisions on their own.
- Your child’s budget can be for any length of time chosen. Younger children are usually only able to focus on shorter periods of time. They may find it more encouraging to create a weekly budget. Older kids are better able to handle longer time frames, so let them choose how long they want to budget for. They can start out with a monthly budget, or one that runs from allowance to allowance, or from paycheck to paycheck. Guide them in this decision, but allow them the freedom to decide.
- Calculate the same amount each month for expenses. An expense may not be the same each month, but the budgeted amount should be. For example, a cell phone bill may be $20 one month and $30 the next, but the monthly budgeted amount should be $25 so that it remains constant.
- Set aside money for gifts. Discuss the gifts they will need to purchase during the year for holidays and birthdays. Add up the total amount they plan to spend then divide it over twelve months. If they don’t need to spend the money one month, they can set it aside and save it for when they will need it. This will teach them to save as well as budget.
- Set up a spending plan. Now that your child knows what they need to put in their budget, it’s time to put things in writing. Here are some common budget items to help your child or teen.
You can add more based on their needs and desires. You may also want to check out 5 Ways Your Kids Will Enjoy Saving for more ideas! While there you can pick up my free Money Tracker For Kids printable!
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Your child can work with this budget for a few weeks to a few months to see how it’s working then make adjustments as needed.