Budget Lessons for Children/Kids - Easy-to-Follow Child Budgets

The importance of following a budget can be taught to a child in many ways. It is important for parents to teach their child about budgeting, whether it be by budgeting time, watching TV, or budgeting allowance money. The child will learn a valuable lesson that will give them the necessary skills to follow a budget successfully throughout their lifetime. By learning these steps from a young age, the steps will become second nature to them as adults.

The type of budget you decide to introduce will depend on your child's age and level of understanding. I will give a few examples of budgets you can use with your child. You will then need to decide what type will accommodate your child's age and understanding, so that they will completely receive the full benefits you are providing to them.

In some households a child's television time is limited to a specific number of hours per day, this may also apply to the playing of video games, and time spent on a computer. You may want to consider this an opportunity to introduce your child to a budget. The child already knows the basics of what is permited by you, so this is a great way to start. You will have to make a few adjustments on your end to be able to give the child the full benefit of learning to budget his time. You would do this by letting him allocate hours to each area for a one week period. For example if the child can watch 2 hours of TV per day, use the computer for 30 minutes per day, and play video games 1 hour per day, you would figure out the 7 day total for each area. It would be; 14 hours for TV, per week; 3 1/2 hours for the computer, per week; and 7 hours of video games, per week. You can set up a table to help your child allocate his time in his budget. Below is an example:

During the school year your child may need to have allotted time to study and do homework. Also, your child may be involved in a school activity that requires them to have time to devote to practicing. You can help your child to budget their time to meet the time requirements to accomplish goals that they need to meet. For example, your child needs 1 hour after school each weekday to do homework and studying, the child is in the school band and needs to practice their instrument for 5 hours per week, and the child wants to be able to have free time to do whatever they want before bedtime. You can introduce them to a budget to help them achieve their weekly requirements for school and band, and show them where they will be able to have their free time. I want to note for the purpose of the example that during the week the child has 5 hours of available time from the time they get home from school until it is time for bed. Here is an example of a budget to fit these circumstances:

I know first hand that children today do not appreciate the value of a dollar. I swear children really do believe that money grows on trees, credit cards and checks stand for free money, and that mom and dad have an endless supply of cash to use at their disposal. A good way to teach them the value of a dollar is to show them how to budget their allowance earnings. This is a great step for gaining knowledge about finances. It is also a great way to teach them about saving for their future, and how to save for something they can not afford to purchase right away. You can let them determine the amounts that they will delegate to each area, or you can give them some or all of the amounts that must be met by the end of the month. My advice would be when teaching a child to budget their allowance is to take it on a month-to-month basis because the child is not setting long-term goals.

In the example I am going to use, the child receives $100 per month for allowance, the parents require they place $50 per month in a savings account, the rest can be used for approved purchases. I will be giving two examples:

In the first example the child is budgeting his money for the month by setting weekly amounts for saving and spending.

In the second example the child is budgeting his money for a period of 6 months, the budget must meet the monthly $50 savings amount. The rest being; money for approved immediate purchases, and money being saved for the larger purchase, must be budgeted by the child to meet his goal.

 By learning these basic budgeting skills early on your child will be successful throughout their lifetime while budgeting their finances.  They will appreciate the value of a dollar, and also how hard you must work to be able to purchase the items you desire to have.  The most important lesson of all they will learn is that money does not grow on trees and if you want something you have to work and save to obtain it, nothing in life is free!!!!