Budget is a simple 6-letter word.
In reality though it’s complicated. Even to the adults.
How much more to the kids.
How do parents like me then introduce the idea of budgeting to the kids?
I would say it depends on the age of the kids.
Also, in their orientation growing up in the family.
As for me, these simple steps helped me a lot to educate my daughters about money and budgeting.
1. Do you need the stuff?
That’s my question every time my girls want to buy something.
I instilled in them the concept of need.
Can’t they live without that stuff that they want to buy?
If they can, then they really don’t need the item.
Many kids want stuff because a friend or classmate has it.
But, for what?
2. Do you really want the stuff?
They don’t need the item that they like to buy.
And still they want to have it.
I ask them if they are sure that they really want the stuff.
Then they can have it.
But the value of the stuff will be deducted from the money which is due to them.
It could be from their school allowances.
Or, the amount of reward for their achievements.
I give them rewards if they belong to the top 10 students in their class.
Or, if they have won in a competition like in essay writing.
Or, if they have excelled in sports like if they are part of a team which won a championship.
But once in a while I let them have their way also without consequences to make them happy.
3. Look at the quality and the price of the item.
In shopping for anything, first off in our list is the price.
Then the quality.
There are pricey items but the quality is inferior.
Those items are not worth of my hard earned money.
If the quality is not commensurate with the price, I would point that out.
But if the quality is okay with the price on the tag and I have the money to pay for it, I get the item for them.
The kids must be aware about the order of priorities in the family.
When my girls were younger they used to say:
“Mama it is only (then they would mention the amount of the item).”
I told them that regardless of the amount it is still money.
Then I asked, “Do you have that amount?”
They would answer “None, but mama you have the money”.
Then I explained to them our priorities.
The food, the bills for the power and water, our daily allowances to go to the University.
5. Be direct and honest about money matters to the kids.
Do not spend money you do not have.
They might get used to it.
6. The allowances given to them are for their own expenses.
Not for anybody else.
Not for the other kids.
And not for the teachers.
My daughters are oriented to report to me or to their teachers if other kids or anybody ask money from them in the school premises.
7. Kids should be taught that they cannot just ask money from anybody.
They should not also accept money or any stuff from anybody aside from us.
8. Savings Account.
If possible open a savings account for the kids.
As soon as my girls arrived in the USA we opened a kiddie savings account for them.
Every salary day I give them shopping money.
But they opt to put the money in their savings.
Whenever we go to the mall, this mama if I have extra money buys stuff they need.
And sometimes stuff the girls want.