Teach Children To Practice Budgeting to Achieve a Savings Goal
Budget: Practice in the Real World
With some newly-earned cash from their weekly contributions to the household, kids can start to work towards a simple budgeting goal. If your kids aren’t getting an allowance yet, read about why allowance is important.
Once kids start earning their own money, having a budget empowers children to spend, save and give that money with purpose. It allows your child to make educated decisions about where their hard-earned allowance dollars go. Budgeting also helps kids prepare for the future and plan for the unexpected.
5 Tools to Help Your Kids Achieve Their Savings Goal
Whether it’s a Barbie doll, video game or tickets to a baseball stadium, kids can practice basic budgeting to achieve their savings goal. Here are 5 actions to take to help them with their budgeting skills:
1 Make a Plan
Once allowance-earners have decided what they're saving for, make an actionable plan to set aside a specific dollar amount, each week, towards the savings goal.
2. Use Visuals
Make a simple chart with a picture of the item they're saving for and an empty box to check off each week as they work towards their goal. (Young children are visual, and seeing their progress towards a savings goal effectively reinforces the effort.)
3. Encourage Them
Root for them to stick to the timeline even if it means forgoing spending on other “wants” in an effort to ultimately reach their reward.
4. Contribute
Parents may consider matching their child’s savings or contributing some small amount to further encourage working towards a longer-term goal.
5. Congratulate Them
When they finally walk out of the store with their hard-earned purchase…heap on the praise, they've earned it! While your child could have paid for his purchase sooner had he used all of his allowance dollars for spending, learning to always put some funds aside towards saving and giving is essential on their financial literacy journey.
Practice with budgeting helps children build necessary financial skills and good money habits needed to succeed in life. Budgeting helps kids resist instant gratification, learn to set goals and follow through. We must teach kids that budgets give us power over our money and help us prepare for whatever the future has in store.
Pro Tip: The Benji Bank is a powerful tool for teaching young kids to budget. With its designated Spend, Save and Give compartments, kids can watch their money grow as they work toward their savings goal.
Is there something (a book, toy or even experience?) that you’d like to budget for? Make a plan together.