Teaching your child how to budget will be useful in various aspects of life, not just when it comes to money.
You budget time, money and resources on a daily basis to help you effectively manage what you have.
So make sure you show your kids how to do the same by teaching them this valuable life skill.
Listen to podcast episode 8 WITH YOUR KIDS, on the podcast player below or on your favourite podcast app. The podcast content is not an audio script of this blog post and has been specifically created for kids. This blog post is intended for parents, so you can reinforce what your kids learn about in the episode.
In episode 8, your kids will hear us talk about:
- What a budget is
- Why budgets are important
- How to create a budget
- What else kids can budget if they don’t have money
What is a budget?
During the episode, we talk about how a budget can help us understand our money better.
For kids, it’s a simple process of looking at what we earn (e.g. allowance, birthday money, selling things) and what we spend.
It doesn’t have to be complicated, just a simple list will do!
Get your FREE printable kids sample budget, parent talking points and budget template!
Needs and Wants
Making a budget work properly for the money you have, involves understanding needs vs wants and the ability to prioritise.
Understanding needs and wants early on in their life, is a huge learning step for kids.
If your kids are struggling to prioritise their needs and wants, listen to Episode 4: Smart spending, Options and decisions, Needs and wants.
What are the benefits of creating a budget?
There are so many reasons that people benefit from knowing how to budget properly!
Seeing where you’re spending your money, whether it’s a one off purchase or a regular expense, can be a real eye opener for many people.
During this podcast episode, we talk about how creating a budget can show you if and where you’re wasting money. We use the example of paying for a monthly magazine that we don’t read anymore.
Listen to episode 8 of the podcast WITH YOUR KIDS, on the podcast player below or on your favourite podcast app. The podcast content is not an audio script of this blog post and has been specifically created for kids.
We also talked about how it can help us see if we’re paying too much for something and could look at getting a better price somewhere else.
Seeing something written down as an expense makes you pay a bit more attention if you’re wasting money on it.
Money that might be useful for a different expense or to invest, for example.
Talking to kids about wasting money
I wanted my kids to think about some potentially unnecessary expenses that they could incur.
They had been gifted a year’s subscription to some kids magazines and it had come to an end. While they liked them, they only flipped through them and focused on one or two pages.
Get your FREE printable kids sample budget, parent talking points and budget template!
When the time came for renewing their subscriptions, we had a chat about how they don’t actually read the magazines anymore.
In the past, I would have just renewed them without having a conversation about it first. This time, I asked them to decide if they felt it was worth the cost.
It turns out that what they looked forward to most, was going to the mailbox and getting mail with their name on it.
They agreed it wasn’t worth renewing their subscriptions, just to get mail with their name on it.
During this episode, we also talked about how a budget can be used to find every dime and dollar that’s being spent but doesn’t need to be.
Revisiting episode 6, will provide a great reminder about how small amounts of money add up to a much larger value.
So if your kids love firefighters (who doesn’t??), then make sure to check out Episode 6 where we talk about a 72 hour rooftop firefighter fundraiser.
How to create a budget?
During this podcast episode, we talk about how to create a budget. We discuss how you can use a pen and paper, your computer or even an app on your phone.
For young kids, it’s pretty simple. They would count how much they earn (allowance, lemonade stand, birthday money etc) and how much they’re putting into their spend, save and donate jars.
Splitting money into those 3 categories, is already teaching kids the basics of how to budget money!
Also, your kids might have set themselves a saving goal for something more expensive like we discussed in the previous episode. Writing down the amount they have, will help them focus on achieving that goal.
Have a chat about where they’re spending the money that isn’t saved or donated. This might encourage them to think about whether or not it was worth it and if it would have been better spent elsewhere.
Remember, when they’re young they’ll make all sorts of mistakes with money.
That’s how they will learn to get smarter with their spending.
You’re providing them with a low stakes environment, where they can learn from a $5 mistake as a kid, instead of a $5,000 mistake as an adult.
So what’s next?
Listen to episode 8 of the podcast WITH YOUR KIDS, on the podcast player below or on your favourite podcast app. Note that the podcast content is different to what’s written in this blog post.
After listening to the episode, build on the content by doing the simple activities below.
End of episode activity: Budgeting ideas that don’t involve money
If your kid doesn’t have any money to budget, that doesn’t mean they can’t learn this essential life skill.
Teachable moments are easy to find and don’t always have to involve money.
For example, at the end of the episode, we talk about school work and how they would budget their time to prepare for a test.
By knowing what content they need to learn and how much time they have, they can make sure they have time to learn everything.
Another example we discussed in this episode was about budgeting snacks for school. You could explain how you make sure they have enough snacks for school.
You don’t give them everything at the beginning of the week or they wouldn’t have anything left at the end of the week. You plan around how much you have and when you give it to them so they have enough for the whole week.
As parents, we’re doing all these little things all the time to plan, budget and make sure there’s enough to go around. Sharing an example once in a while, goes a long way!
Teach your child to budget!
You don’t have to be an expert at budgeting to show your kids what a basic budget looks like!
Simply download the sample budget below, and use the talking points I’ve provided to guide you through.
Get your FREE printable kids sample budget, parent talking points and budget template!
The sample budget is already filled out to give a complete overview. A blank template is also provided so your child can create their own budget too.
Your teenager and your budget
As kids get older, knowing how to budget properly will play a bigger role in your own family budget.
If they already know how to budget, they should have a better understanding of their needs vs wants and know where their money is being spent. This in turn, might make them more aware of how their spending habits affects the overall family budget.
I said ‘might’, so don’t take this as a guarantee that they will!!
If you have a teenager and want to start an allowance for them or scale up your current one, I highly recommend listening to Episode 21 of the Art of Allowance podcast.
Money expert John Lanza speaks to Larry Hagner from the Dad Edge podcast. They provide some valuable insights on teenage allowances and the increased responsibility that comes with it.
They shared some interesting stories and teachable moments that were a direct result of giving their kids the opportunity to manage a larger amount of money.
They also share how this helps them (the parents) save money too! Win win!
Next: Episode 9 Coming Soon!!!
Episode 9 will be focusing on banks
Related Posts:
Episode 4: Smart spending. Options and decisions. Needs and wants.
Yasmin says
Excellent
There is a lot for the children to learn in this episode.
Excellent opportunity for the children to listen and learn and it is the right length for the children to pay attention.
Thank you.
Anisa Kurji says
Thank you!