Family Budgeting Strategy for Youth

Hi everybody I just read the last PH newsletter, in particular the article about couples creating positive meetings about their budget.

I’m trying to figure out the most effective way to teach my 12 year old son who is both a hard worker, very desirous of earning, saving,spending, money + bonus he loves Math. Much of his amped desire to earn has been gleaned over the last 9 months through a video game plays that reward through “monetary” points. It has its pros and cons and of course our culture trains us this way but I’m really trying to keep a positive spin on his lessons around this.

So after reading the article I was thinking that having a family meeting with a calculator and budgeting all his own could be productive. Before reading the article I was thinking about providing three jars: one for saving spending and one for charity (homeless children shelter in our community). We’re going to open a savings account for him as well and make deposits on a regular basis from the save jar.

I haven’t really gotten a handle on how to approach what’s appropriate spending and what’s not. Recently he wants me to provide $500 for his brother to build him a new gaming computer. His argument is that this is a lot less than what it would cost to buy a new one retail. I certainly don’t have five hundred for this. He has a summer job doing landscaping but it would maybe take two summers to earn that much.

anyway you can see where all this is going but I feel like I need to approach it with him on some kind of regular basis and budgeting is not my strong point so I’m really working on it. His dad just teaches him to spend large amounts of money indiscriminately.

Anyone with xperience teaching their kids these principles? Strategies you want to suggest ? Feedback thoroughly welcome!


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First off, kudos on wanting to share budgeting lessons with your young son. It really is wise to teach kids young, so they have strong money habits as adults. I’m happy to hear your son enjoys math! I have found that gamifying the budgeting experience could help young kids understand and find it enjoyable. Hence why I think the jar idea is a great one. I appreciate the visual it provides, and I think it’s a great way to keep kids engaged.

Here’s a video we published on The Penny Hoarder about teaching your kids about financial literacy:

My biggest suggestion is to keep it consistent. Maybe it’s a monthly (or weekly) check-in session where you go over what’s in the budget. Make it fun! Maybe you do it over his favorite treat, so he has something to look forward to. Talk about why you’ve made certain decisions and ask him about his own budgeting decisions. Guide him wherever needed, and be honest and upfront about what you don’t know – you can make it fun where you two explore the unknowns together.

Let him choose the charity or project you all donate to. Aside from putting aside money in savings for rainy days, I think it’s OK for him to set his own savings goals whether it’s $500 for a new computer or $20 for summer hangouts with friends.

Curious to hear how others are managing this!

Hi @kumba! It sounds like you’re off to a great start with your desire to teach financial literacy to your son. And I agree with all the suggestions @maryann suggested!

Using spend-save-donate jars is a really popular approach to teaching kids about budgeting. And if a $500 computer is his big wish list item, that can be his long-term goal that he works up to save for – even if it takes a couple summers or more!

I have a 15 and a 12 year old. When i first divorced, I opened up savings accounts for both of them, and put in 10$ with each paycheck. They see that account grow. I give them allowance by check, so they have to go to the bank (it’s across the street) to cash it. I want them to know how to use a bank, and get comfortable handling checks. My youngest will save up his allowance checks so he doesn’t spend them, and cashes them a few months at a time. They are both required to deposit some into savings, and never allowed to remove it. (At least not yet. There’s only a few thousand in each, and it won’t touch college or trade school, but it will help with a first car.) I sit down with them when I pay the bills so we can talk about how much things cost in relation to what you may earn. They see me saving and we talk about why it’s important. They give regularly at church. They will both keep money at their grandparents so they don’t spend it randomly. Both boys do a great job of saving up for what they want! They know that mom can’t (and won’t) cover everything they want, but I will make sure they have what they need. I don’t often try to talk them out of saving for any particular thing, but I do talk about quality- the cheapest may not be the best deal if it breaks immediately.

Wow, I’m rambling.

This is really helpful. Thankyou! I’m starting to include use of the debit card in my son’s lessons. We don’t use checks. I like the emphasis on your providing what they need but not always what they want. That’s a huge point for parents. Also, hearing two parents say they encourage their kids to purchase what they want with their own spending money gives me food for thought. I Ido talk about quality & planned obsolescence. I must not be still aware be thinking of his money as mine! Spending $50 a month on a Lego tank is outrageous.

  • Part of my dilemma on how to balance his his experience is that his dad will randomly buy three $50 Lego tanks one month (just hits a toy buying mood), whereas I will but one for him at Christmas or Birthday…in part hoping to discourage/ balance out overconsumerism.

Maybe it’s a bit much to try to take this on too…since I have no influence on his dad’s spending habits…

Thankyou for all your support & insight !

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It IS hard when the 2 households handle money differently! His father makes significantly more money than I do, and honestly, doesn’t handle it as well. I’ve resigned that all I can do is teach them they way I want and let them know why I believe that it is the right way. They can draw their own conclusions. And I did forget to mention the debit card! We just got Bluebird pre-paid debit cards for the boys, last week, and are starting with that.

This is a great topic. I feel like kids are not very prepared after leaving home. I have a 24 year old and a 14 year old. Even if we had the money to spend on expensive items we had them save. With girls clothing is a huge expense. So in order to curb the need to spend unnecessarily. I started telling them what the budget for school clothes was. Money I had saved for this shopping trip every year. I then give them the cash. They have the cash to spend and I don’t tell them what they can spend it on or what stores. I let them figure out. So they both figured out pretty quick. If they shop at Kohl’s and use my coupons they could get a lot more than spending it all on name brand items. Don’t get me wrong they still buy the in style stuff but they decide how much. My youngest now picks 1 or 2 items that she really wants. Normally shoes, lately a pricey pair of leggings, that she saves for to buy. If she really wants it she saves now. I can afford what she asks for most of the time. I feel like this lesson is of much greater value. My oldest now out on her own and married- saved to buy her 1st car had 5,000.00 to put down on it then was able to finance the rest. She was so proud. She also has zero credit card debt. She pays in cash were possible. Working on the younger one. She pet sits and already has 1000.00 save to help buy her 1st car. We told her we would match whatever she saved. She has 2 years so we will see. I just keep them in the loop without dragging them down with my household finances. They both got what they needed and some of what they wanted…

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