How to Help Your Kids Create A Budget

Putting money away is an important asset to create a budget.

Teaching your kids early about money management is crucial for their long-term financial stability. Helping them learn how to create a budget is a skill worth mastering. This is a skill that they need to develop early and often. Keep in mind that kids are very observant, and they will pick up what you do and say. Be prepared to lead by example. To master this skill, teach your kids the importance of saving and making money, as well as how to set goals and money.

Instructions

1. Explain to your kids the importance of having a budget, and why it's equally as important to stick to it. Let them know how it helped you in your life, and how they are benefiting from it at the present time. Tell them how difficult it is to make choices about spending money now but how it will help achieve their goals later.

2. Buy a piggy bank as a gift for your kids. Putting aside their own savings will make them feel like a grown up rather than rely on you to take them to the bank to deposit money. Let them know that the piggy bank is their "savings" and the money that goes in it is used for emergencies and unexpected expenses.

3. Teach your kids how to earn money. Give them a weekly allowance and make a chore chart. List all the jobs that your kids can do and how much each one pays. Make sure the chores are based on your kids' age. It is important for kids to learn how to help but it is also important to show them that working hard earns them a reward. This will help them look for a job to earn money once they are older.

4. Help your kids make a budget sheet. Get a blank budget sheet and write down the date at the top. Explain to the kids that they should do a budget sheet every week to remind them of the budget and help them stick to it.

5. Write the amount of the kids' income source for the week. For example, if allowance is $15.00, write $15.00 from allowance. If they make $5.00 for taking out the trash and $14.00 for babysitting this week, write down $19.00 from earnings. If they receive any money as a gift, write down $10.00 from gifts. Add them all up; the total is $44.00.

   Write down the expenses: $11.00 for after-school snacks, $10.00 for cell phone minutes, $11.00 for movies and arcade. Add them all up; the total is $32.00. Subtract the expenses from the earnings, and you will have $12.00 in excess. Let them know the money in excess is the savings money that goes in the piggy bank.

References

• PBS Kids Go: My Budget Sheet
• PBS Kids Go: Managing Money: Create a Budget