Budgeting Basics

Should children learn how to balance a budget? This is something many parents want to know as their children will one day be responsible for their own financial needs. Kids often want their parents to buy things since they don’t have the money themselves, but kids may not understand how important it is to keep a budget. They may not understand how their parents try to maintain a spending limit each month. This can be a good time to introduce budgeting basics in hopes of getting kids to learn how to save money when they want to make purchases in the future.

Budgeting basics may include knowing how much money you have and what you can do to help it last longer. Kids that earn an allowance could learn how to save and spend wisely. But kids who do not earn an allowance may learn about budgeting a little differently. Adults often know how much money they have to work with each month. They know what bills need to be paid and they know where to shop to get good deals on everyday items and products. Some adults can do this and have money left at the end of month, but others end up being broke until their next paycheck.

Parents can introduce some budgeting basics to their children when they think they are ready to take on the task. This means kids would need to know how to make wise decisions when it comes to spending. They would need to know what items are worth buying now and what is considered a need or a want they could buy later. They could set goals on how much money they want saved in their piggy bank or work toward opening a saving account at the bank. They would also need to review activities that have a reoccurring cost such as a cellphone bill.

Some elements of budgeting may be better left to teens or young adults, but it is best to try and introduce the concept of budgeting early. Knowing your limitations and how to save will help you maintain control of finances. You may learn you need to make changes to the way you live in order to stay within budget. You may have goals to pay off credit card bills, medical bills, and other expenses such as the mortgage. When you are successful in maintaining control of your spending it will be easier for your children to learn how to budget.