Budgeting Lessons for Children/Kids - Easy-to-Follow Simple Child Budgets

Importance of teaching your child about budgeting

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.

Budget for television, computer, or video games

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:

Day  
Computer Time 
Television Time
Video Game Time
Sunday 
1 hour 
3 hours 
2 hours
Monday
 
1 hour 30 minutes 
 
Tuesday
 
2 hours 
 
Wednesday
30 minutes 
30 minutes 
 
Thursday
 
2 hours 
 
Friday 
1 hour 
2 hours 
2 hours
Saturday 
1 hour 
3 hours 
3 hours
Total Number of Hours
3 hours 30 minutes
14 hours
7 hours
The child successfully budgeted the allowed time for each category in a one week span.

Budgeting time for school studies, practicing, and free time

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:

Day 
Homework and Study Time 
Band Practice Time 
Free Time
Weeknight Total
Sunday
 
1 hour
(weekend limits)
 
Monday 
1 hour 
15 minutes 
3 hours 45 minutes
5 hours
Tuesday
1 hour
15 minutes
3 hours 45 minutes
5 hours
Wednesday
1 hour
15 minutes
3 hours 45 minutes
5 hours
Thursday
1 hour
15 minutes
3 hours 45 minutes
5 hours
Friday
1 hour
2 hours
3 hours
5 hours
Saturday 
 
1 hour 
(weekend limits)
 
Total Hours
5 hours
5 hours
 
 
The child successfully bugeted the time to meet the requirements in each area. You can also note that each weekday the activities remained in the available time frame between after school and bedtime.

Budgeting examples for a child's allowance

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.

Example 1 - Standard monthly budget

Weekly Allowance 
Amout for Savings
Amount for purchases 
$25 
$5 
$20 
$25 
$15 
$10 
$25 
$20 
$5 
$25
$10
$15
Totals
$50
$50
At the end of the month the predetermined $50 for savings is met.

Example 2 -- Budget to save for a larger purchase

Weekly Allowance 
Amount for Savings 
Amout for Purchases (Now)
Amount for Purchases (Future)
$25 
$10 
$5 
$10
$25 
$15 
$5 
$5
$25 
$15 
 
$10
$25
$10
$5
$10
Total Amouts
$50
$15
$35
This budget is for 6 months, each month the predetermined savings amount will be met, and at the end of the month the child will have $35 set aside for their future purchase. So by the end of the 6 months $210 will have been saved for the larger purc

Do you think it is important for your child to learn how to follow a budget?

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Budgeting for a lifetime

 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!!!!

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Comments 23 comments

akirchner profile image

akirchner 5 years ago from Central Oregon

Cool idea and congrats on the win~!


JillKostow profile image

JillKostow 5 years ago from Pennsylvania Author

Thank you akirchner - I am out of breath from running around my house and my children think I may have lost my mind for real this time!!! Just a little excited...Congrats to you too, I seen your name a few times!!!!


Purple Perl profile image

Purple Perl 5 years ago from Bangalore,India

Excellent hub!Serves as a great guide, coming from a parent like you.Congrats too!


Pamela99 profile image

Pamela99 5 years ago from United States

Congratulations of your win and I can see why this hub was chosen. It has some great ideas.


Song-Bird profile image

Song-Bird 5 years ago from Michigan

This is a great idea! Congratulations on your win!


travelespresso profile image

travelespresso 5 years ago from Somewhere in this exciting world.

Great work and congratulations on your win.


JillKostow profile image

JillKostow 5 years ago from Pennsylvania Author

Thanks everyone for the comments!! Also thank you for stopping by to read it!!!


aphrahman profile image

aphrahman 5 years ago

Nice guideline, appreciate it for good effort and nice presentation.


JillKostow profile image

JillKostow 5 years ago from Pennsylvania Author

Thank you aphrahman!!!


Loren's Gem profile image

Loren's Gem 5 years ago from Istanbul, Turkey

Great share! This is indeed very useful. Congrats on your win! :-)


JillKostow profile image

JillKostow 5 years ago from Pennsylvania Author

Thanks Loren's Gem -- I figured it would be great to have a basic outline of different ways to teach budgeting to children. When you think about budgeting the thought of money comes to mind, kids do not always have money, but they do have time and can learn to budget that.


stephhicks68 profile image

stephhicks68 5 years ago from Bend, Oregon

Wonderful job! As a mom of 4 kids, I give this hub a big thumbs up!


JillKostow profile image

JillKostow 5 years ago from Pennsylvania Author

stephhicks68 -- Thanks again for reading and enjoying. I am glad so many find it useful!!!


Analana profile image

Analana 5 years ago

I love the idea of having my kids budget the other aspects of their lives the same way they do money. Congratulations and a huge thumbs up from me too!


JillKostow profile image

JillKostow 5 years ago from Pennsylvania Author

Analana--It works really great for kids who are young so that they can have some concept on what budgeting means, then as they grow older it will be easier to apply what they learned to budgeting their money. Thanks for reading and commenting!!


Les Trois Chenes profile image

Les Trois Chenes 5 years ago from Videix, Limousin, South West France

This is one for my son, certainly. Any tips on how to get them to do it though? Voted up!


JillKostow profile image

JillKostow 5 years ago from Pennsylvania Author

Les Trois Chenes - I am glad you found this useful...a tip on how to get them to use it would be that they don't get to have the "extras" until they set up the budget. Ex. no tv time until the budget is in place and they are showing how to delegate their time..


MeanGreen profile image

MeanGreen 5 years ago

nice work. congratulations on your win!


melbel profile image

melbel 5 years ago from New Buffalo, Michigan

Nice charts! It looks like you put a lot of work into this topic... great job! Rated up!


JillKostow profile image

JillKostow 5 years ago from Pennsylvania Author

melbel - Thanks!!! I wanted to be sure I gave clear examples, that way if someone wishes to put it to use they will have the basic structure.


Johnny Parker profile image

Johnny Parker 5 years ago from Birkenhead, Wirral, North West England

My kids could do with reading this and they are in their twenties!

Congrats on win.


oceansnsunsets profile image

oceansnsunsets 5 years ago from The Midwest, USA

Its great to encourage responsibility in children, thanks for sharing these tips. Congratulations on your win for this hub in the finance contest as well!


JillKostow profile image

JillKostow 5 years ago from Pennsylvania Author

oceansnsunsets - Thanks again, This is a perfect way to show and teach children responsibility with budgeting. The lessons they learn as children will last them through adulthood, and by learning it young, it will become second nature!!

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