Involving kids in budgetting

**mommy4ever** · 01-06-2009, 05:15 PM

I don't want to start now, he is freaked out that we owe on the house and RV..lol. So other debts would be very scary to him, and I don't want him worrying about the family, the family is fine at the moment. He doesn't understand that mortgages are not evil. But kinda glad he thinks that way.

Once he turns 16, I'm going to start getting him to write out all the payments. I get free checks, and use the internet to pay ALL my bills, so I'll let him write the checks, and do the transfers. I want him to know how to budget. To see where money goes. Hands on is the best way for him.

If I give him a bank account balance, "Here, this is what money we have this week or month, and here are the payments that need to get made, these things require we need to set money aside to save for. What do we have left once the must-pays are done. From that can you set up a budget for gas, bus passes, groceries and spending money." Do you think he'd learn to budget? Understand that there are many expenses to having a home, family, cars. Right now, despite us talking to him, just seems to think we have endless money, to him 35K a year is a wild amount of money with infinite possibilities. Where it's actually below the poverty line for a family our size. I want him to gain perspective. I want him to learn to save. There's no reason once he gets a job that he can't save for a car or education, or even a home.

It would give him a couple years of practice understanding what needs to be paid. How to balance it. This is something I never learned as a kid, I have learned the HARD way as an adult. I don't want him to learn that way. Of course, he'd be done and his younger sister would start learning that, and a couple years later the next child. I think learning to create and try to maintain a budget with real numbers, would be a great exercise for them. Not to young though. DS maturity isn't there now, and as I said, owing money stresses him. So I'd like to have an almost clear slate for him to start on. When the last debt is nearly gone. So he can see what debt does, but not so much that he freaks out horribly.

Still thinking on it. I know schools just don't teach the kids how to do it. They are bombarded with cc as soon as they turn 18 if not sooner. So I want them to learn how to live without that, save for things.

GOod idea or bad? Any ways to improve on it?

**Momto2Boyz** · 01-06-2009, 05:26 PM

Actually, I had a class in HS that was mandatory for graduation called Consumer Economics and we were taught how to balance a checkbook, use a household budget, etc. It was helpful, granted, I was a senior and had had a checking account since I was 16.

My parents never involved us in their budget (which I've heard over and over not to do with kids becuase it can cause them stress to see family finances) but at 16, my brother and I both got our first jobs. Along with it, we got our first paychecks, first checking accounts and our first budget.

Our parents sat us down and showed us how to manage our money. We were expected to put a certain amount of each paycheck into our savings and we had our own "bills" such as paying our own portion of the car insurance (that was paid to my dad) and set aside a budget for spending money, clothing we just HAD to have, etc. My parents also gave us our school lunch money at the beginning of each month and it went into our checking accounts. We were expected to budget it out for school lunch throughout the month.

They gave us total freedom with our money, but they certainly had expectations. We were told up front that if we bounced a check, we paid for it...my parents would not bail us out. I know they kept an eye on the statements, but they pretty much let us go with it. Both my brother and I are pretty financially responsible. DH and I have no debt other than our mortgage, and I know my brother doesn't have any credit card debt either.

So I think budgeting is good, but instead of showing him the household budget, I would suggest setting up his own budget and helping him out with it for awhile!

**IntlMom** · 01-06-2009, 05:28 PM

I like that you are even considering.....after all, how did we all learn to budget/spend/save? Most of just learned by trial and error - lots and lots of errors!

For some reason, I was fortuate, and have always been more frugal than my mom, even as a teenager I shocked them with how far I could make money go. But I know that I was unusual, you can't count on that, so yea, I think your idea is good. Just find what works for you guys and go with it!!!

**zakity** · 01-06-2009, 07:52 PM

Really, they say not to involve kids? Ugh... I did that one wrong too.

I have always involved the kids. If they want to see where the money is going and such, I show them. They see me paying bills and will sometimes come over and ask about my bills spreadsheet. I think it makes mine more comfortable knowing that we have some money. It also shows them that it doesn't grow on trees and that you have to be careful with what does come in.

**Thrifty Mom** · 01-06-2009, 08:14 PM

My kids were started early. At about 9 years old they got their lunch money for either a week, or two weeks & had to be responsible enough to take it to school each day. We had three small jars & each kid kept their money in one. I gave them enough change & ones that they could take the exact amount. If they packed a lunch, they just took milk money & left the rest in the jar. About the same time they started getting an allowance. They started out with $5.00 each. They knew from the start that the money was for their "treats". Mom was not going to throw gum in with the groceries, mom was not buying rounds of ice cream, etc. When they wanted a treat, they were allowed to buy it with their allowance. After only a month or so, DD # 2 realized that she could skip the treats & buy a shirt with her $5.00. It went from there. They got steady increases over the years & when they began to drive, they paid their car insurance. I had a credit card with $500.00 limit, that each of them used at one time or another & had to pay it off.(I did not use the credit card, it was zero unless they used it.) All three kids are out on their own & all are managing fine. If they are not fine, they haven't told me! They know not to expect bailouts.

**kmonokwe** · 01-06-2009, 08:18 PM

I know a family where the kids (both under 15) receive all money the family spends on them - all clothing, spending money, the kids' portions of their tithes, money for shoes, school supplies, EVERYTHING. The parents figure out what they've budgeted to spend on the kids, and actually give the kids that money. So when they've grown out of their jeans, the children have to buy new from the cash the parents gave. If they've blown it all on candy and video games, without managing their money, the kids have to wear highwater jeans til the next month! The kids don't have to make money, of course, they only have to manage the money given to them.

It seemed pretty extreme when the family explained it to me - the youngest was 6 when I first heard about it. I'm not sure if I would start it as young as that. However, it does seem like a great exercise in real-life expenses and money management.

Perhaps beginning something like this when your kids turn 15 or 16 would be a good way to help them learn how to deal with income, manage it and be careful with it. Once they get their own jobs, it becomes a little confusing, but including things like car insurance and even debt repayment (their own little corner of the debt) could possibly be a good way to get them involved without stressing them out by showing them the big picture.

**MomToTwoBoys** · 01-06-2009, 08:58 PM

I think it would be great to start him when he turns 16. I'd explain everything step-by-step and let him watch you in the meantime. Start with the basics (like the income per budget period, expenses/debts, and the remaining funds) and then work your way up.

Budgeting is a huge stickler of mine and it's occupying about 34 pages in my book, so I'm hoping I can help out somewheres.

Not only show him what needs to be done, but explain to him the reasons behind it and why it's important to do it. Also show him what happens when it's not done and let him see the difference for himself. The basics are pretty easy to learn, but it's the little things in between that makes it hard for some people to grasp. I'd just explain it to him the best you can and try not to confuse him. Kids learn best when things are in front of them to where they can see them.

Let him find a way that works for him and allows the household budget to continue to function in its best form.

**treeluva** · 01-07-2009, 12:53 AM

When I was about 11, I became listed as a signer on my parents checking account. (There reasons for this had something to do with estate and will - why I still do not understand) But, at age 11, I started writing out the checks with my mother. We would go through all the bills and I would write the checks. I think the reason for this was to actually learn how to write a check, but I also learned how to balance a checkbook and to understand where the money goes.

Those lessons have stayed with me. I never miss a payment on anything and I always know how much money I have available to me.

Unfortunately, the lessons about credit card debt never got taught to me, mainly because my parents never carried a credit card balance. If they didn't have the cash for it, they just didn't buy it. Which is great and was great for me to see, but I never understood the dangers of credit card debt because my family never had it.

I don't see anything wrong with sitting down with the children and explaining to them the responsibilities of the family finances. Actually, I think it is a great thing to do for them.

But I would also try to incorporate some type of lessons with debt in a controlled environment where they can learn the lesson without getting into too deep. Whether that be to lend them some money that they have to pay back with interest for a set period of time or to actually see family debt obligations, I believe it is a good experience for them to have.

For my oldest child (10) I actually set up something similar to that for her to manage. We went shopping with a set amount of money I had budgeted. I allowed her to pick out the style of things she wanted that were on the list of things she needed, and when we got to the limit of her "credit" we had to stop shopping.

Now, each week when she received her allowance, she received her normal allowance plus extra for the clothing. Each week she has to "pay" me back in installments for the clothing. Since she is only 10, of course I already paid for the clothing and this is mainly a teaching tool for her to understand how using credit is not free money.

When she is older, I plan on having her more involved with her own budgeting of funds for her clothing, personal products, and entertainment. Meaning basically, like another poster stated, having her responsible for the budgeted amount per month for herself. In case she runs out of money due to irresponsibility, we will have a credit/debt plan set up where she can borrow money that she will have to pay back with interest. Of course, the money she pays back will come from her already set budget monetary amount, so she can actually feel the sting of overspending. Hopefully, this will teach her at a young age the dangers of credit and debt and how to responsibly budget money for the necessities in life.

**Patty A** · 01-07-2009, 08:23 AM

This may be way to much for the kids age now, but later on it may really help for you to check out this website that has lesson materials on it. For those that homeschool this would be a great lesson on budgets. Lesson Worksheets and all is included.
http://www.moneyinstructor.com/budgeting.asp
I believe even little kids can gain a lot of money management skills even at a young age. I think its important that they know how fast the money goes paying bills. I don't think you want to bomb them with to much information or stress them with tight budget information.
But something as small as there allowance can teach the budget information.

**my4littlebuffaloes** · 01-07-2009, 08:43 AM

I know people that give their kids huge allowances each month. They sit down and budget with them everything they need to cover with their allowance. Food (lunches, snacks), clothing, gifts, gas money, spending money, activities, etc. sounds daunting to me and a lot of money to give each child in a month. But it does teach them a lot and then the parents don't have to deal with constantly paying for things for the kids.

**my4littlebuffaloes** · 01-07-2009, 08:44 AM

Forgot to say that I just sat down and did a budget with my 8 year old (her prompting) to figure out how she should spend her income from dog walking. $11 a week = $1 church, $5 savings account (college or car) and $5 spending.

**elphie** · 01-07-2009, 09:11 AM

I think it really depends on how you present the information. My kids are only eight and nine and they know that we have a budget. BUT, the information is presented in a very factual way, this is how much comes in, this is how much we spend on neccesities, so this is how much we have left to choose what to do with. They understand that every choice has a consequence (an opportunity cost is what economist call it) and that we have to prioritize our wants.

I think that when "experts" recommend not involving the kids what they really mean (I hope) is not involving them in the worry or making them somehow feel that it is their responsibility to solve the problem. My kids know that no matter what they will have a warm bed and food to eat, they do not worry about the bills getting paid. They don't even worry about asking for things because they know we will discuss their wants and make a choice based on facts, not emotions or guilt.

So, yes, I think it is a good idea to involve kids in the family budget as long as it done in a way that they are emotionally mature enough to handle.

**momof2joys** · 01-07-2009, 01:37 PM

Thank you for all the helpful tips. My step-daughter is 11 and is already talking about wanting money!! She understands that she has to pay for most stuff on her own, and since we don't do allowances, it comes from birthdays, Christmas, etc. I have found that one thing that works for her, is to have the money in a gift card!!! When the gift card runs out, so does the money!! She has had to put a few things back because she didn't check prices and such, all a learning experience!!!

Thanks again for all the helpful tips!!!

**angelbumpkin** · 01-07-2009, 03:54 PM

I have been doing budget with my kids for over a year. My youngest are both 7. The even go tell their friends that we have to save for special things. This includes allowance, birthday,christmas, or whatever else they may get money for.

**mommyoffive** · 01-07-2009, 04:05 PM

My oldest is only 12, so we haven't done any formal instruction on budgeting. We do counsel him though when he has money to spend. Sometimes he spends it wisely, but sometimes it burns a hole in his pocket (ie. go to a store for what he wants, they don't have it, so he impulsively chooses something else). However, kids do listen. Mine ask me all the time if such and such a thing would be too expensive for us to buy because they hear me using those words. Sometimes I take the time to reassure them that we are not having money troubles. LOL