Top 5 tips to teach kids how to budget

Top 5 tips to teach kids how to budget

It is very important to teach your kids about budgeting from a young age. In this way, they will learn the basics and have a small notion of what money means. Keep reading to discover all the details!

It is very important to teach your kids about budgeting from a young age. In this way, they will learn the basics and have a small notion of what money means. Keep reading to discover all the details!

Your child may not have a full-time job or a mortgage. But basic budgeting skills can help him plan spending and set him up for long-term success handling money. In this article, you will find the best five steps to succeed!

The first step in building a budget is figuring out how much money comes in.

The first step in building a budget is figuring out how much money comes in. For tweens and teens that means regular income, such as paychecks from jobs and allowances, as well as money given to them on birthdays or holidays. Have your child add up what he receives in a month, that’s his total monthly income.

Secondly, required expenses are necessary costs you must pay regularly, they’re the must-haves. For a middle or high schooler this could be a monthly cell phone bill, or gas and car insurance if your child drives. Total these costs over a month to determine a baseline set of expenses.

Once you’ve covered necessary expenditures, explain that what’s left can go into your teen or tween’s savings account.

Once you have a total for the required expenses, have your child subtract that number from her income. This reveals whether she has enough to cover her necessities, as well as how much money is left over.

Once you’ve covered necessary expenditures, explain that what’s left can go into your teen or tween’s savings account. She also could use extra funds for discretionary purchases such as going to the movies or buying concert tickets—the nice-to-haves. But remind her that money is finite, and sometimes that means making trade-offs.

Finally, tweens and teens may not be able to afford some big-ticket items right away, such as a bicycle or even a car. In this case you can help your child set a savings goal and then plan how to achieve it.

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