Starting to teach kids about budgeting their money is an important life skill that they should start learning at an early age.
Simple Ways To Teach Kids About Budgeting
Kids need to start learning about the concept of money and budgeting when they are young. Without learning these basic skills, kids are more likely to grow up and be in debt as adults. That’s why it’s super important to Teach Kids About Budgeting at an early age.
It’s always a shock to me when I meet other adults who are in a ton of debt, or even worse, have no concept of how money works.
Growing up, my parents forced me to work for money, save money, and buy my own things. It was annoying at the time. I would see all my friends get the latest clothing from Abercrombie while I babysit every weekend for a month and could barely afford a new teeshirt.
But those hard money lessons as a kid came in really handy when I grew up. I not only had enough money saved up to buy a brand new car at age 18, but I had money set aside for college and my first apartment.
But what was even more valuable that my parents taught me was how money worked. So by the time I was an adult living on my own, I knew what a credit score was, what a 401K was, and how to budget and save money.
It’s these lessons I learned as a child made me an adult with very little debt and early retirement on the horizon… even while being a single mom.
Get your kids started on the right path to financial success and Teach Kids About Budgeting starting now!
How To Explain a Budget to a Child
To even begin teaching kids about a budget, you need to first teach them the concept of money. Kids are never too young to start learning this.
When they are really young, you can show them the difference between coins and cash. Letting them watch you pay for good using cash, will start to get their little brains learning about the exchange of goods for money.
Here are some more tips to Teach Kids About Budgeting:
1 – Give Them An Allowance
A lot of parents think giving kids money for allowances is wrong. One mom told me “They should just be expected to help out, they shouldn’t get paid to help around the house.”
And I do agree with this… partially.
I think kids should be giving specific items to do around the house to help out. My daughter has to clean her room and bathroom every week and pick up dog poop. She does these things as an expectation and does not get paid.
But she does have the opportunity to earn an allowance by doing extra things around the house, like washing windows, or cleaning other rooms, etc.
The point is… kids need an opportunity to MAKE MONEY if they are ever going to learn the value of money.
Kids need to know how hard it is to earn money and how to budget the money they do have.
2 – Help Kids Design a Budget
There are several ways you can help your child come up with their very own budget. It doesn’t need to be as complicated as the one you use!
For smaller kids, you can start them off with a savings tracker. Print out a fun savings tracker for kids and have them keep track of how much money they have. They will have fun filling in space and will have a desire to earn more to keep filling it up.
Or you can give them a goal to work towards. Have them pick an item they want to buy themselves (could be a toy or even a pack of gum). Have them work towards that specific goal by keeping track of how much they have.
For older kids, you can print out a kid’s budget template and start teaching them to keep track of their money. A simple kids’ budgeting sheet will help them see how much money they are earning as well as where their money is going.
3 – Let Them Buy Things On Their Own
If you have preteens or teenagers, they should definitely be purchasing items with their own money. Obviously, you’ll still be buying their necessities like basic toiletries and school supplies.
But teenagers should be at a point where they spend their own money on unnecessary items. If they want makeup or money to go see a movie with their friends, it should be purchased by them.
Having kids pay for their own items will teach them the value of a dollar.
My middle schooler is too young for a job so she finds other ways to make money. Because I make her pay for the smoothie she wants on the weekend, or the new hair accessories she HAS to have.
If you have really little kids, you can still have them pay for small items like a candy bar at the grocery store out of their allowance.
Trust me, when a child has to start buying items on their own, they are a lot less likely to beg for things in a store.
4 – Let Them Spend Your Money Wisely
In the past, when we would go back to school shopping, I used to just get my daughter whatever she needed. But as she got older she started wanting name brands like Hollister, American Eagle, and Abercrombie. So I started to give her a budget.
It was still my money because back to school clothes are a necessity. But since she was the one who wanted the name brands, it was up to her to budget the money I set aside.
So I gave her $100 (which is like a million in the eyes of an 11-year-old) and told her she could get whatever she wanted for clothing.
I was pleasantly surprised when she found a basic tee shirt she wanted but decided against it because it was $30 and that would take up too much of her budget. She said she could get cheaper tee shirts at Target.
I was so proud!
Even though it was my money, giving her that budget to stick to made her a lot more money-conscious than she’s ever been. And that’s something I want her to remember as she grows up.
5 – Play Monopoly
It sounds funny, doesn’t it? I’m telling you to play a board game with your kids to help teach kids about budgeting. But if you start young kids off with even fake money, they will start to learn the concepts.
Playing games with fake money is fun. But what your kid won’t even realize is that they are learning about money at the same time.
They are learning how to get more money. And how to budget the money they have when to buy things versus holding on to the money they have. They even learn that sometimes things happen out of their control and there go $200 fake dollars!
Playing games that involve fake money are actually a great way to start teaching the concept of money. All without your kids even knowing it.
6 – Lead By Example
Monkey see monkey do. Most adults I know who have bad money skills have parents who have bad money skills.
Kids don’t learn about money and budgeting and finances in school. They learn it from their parents.
The best thing you can do is lead by example. Let them see you paying for things in cash when they are little. And try to stay away from using credit cards in front of kids.
My daughter used to think credit cards had endless money. You could buy anything you want. That was a lesson I had to quickly teach her about!
Teach older kids about bank accounts and saving money. Even take them to the bank with you to cash a check.
If you go shopping, let them see you do some price comparisons. Compare brand name versus generic at the grocery store. Or even say things out loud like “I love this sweater, but for this price, I can get 3 sweaters at Target.”
Teach Kids About Budgeting by Encouraging Them To Budget Their Money
Get your kids started off on the right foot when it comes to their finances. So when they become an adult, they will already be well equipped knowing how money works, the value of a dollar earned, and how to budget the money they do have.
What other ways have you used to teach your kids about money? I’d love to hear your suggestions in the comments below!
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