Budgeting with Small Children and Progression

When teaching children anything in life it usually comes down to a simple solution. The practice of budgeting in younger children is a very hard task to teach a younger child, but as they mature, it will become gradually easier.

To begin with, it may be advisable to remove something from a young child that you provide and allow them to have the ‘pocket-money’ in order to buy the item. This works very well with items that are luxuries, such a sweets. However, it does rely on a very stern hand and saying no to your children when they ask you to help them. This will help in the basis of starting the understanding of budgeting for the younger children. It may also help them to understand the value of bulk buying.

With this, you will however, need to offer advice and guidance with the budgeting as with all tasks given to small children. You shall have to advise them about the value of money and initially help them with obtaining the very best deals and how to look for them.

In older children, this becomes a slight bit easier while becoming more difficult at the same time. While it is easier for the older children to understand the value of money initially, depending on the age of the child, the ambiguity of the task becomes ever greater. This is purely because older children want different things and can be harder to teach the skills of budgeting without having the ‘real-world’ experience.

Initially, it may be advisable to charge them a small amount of rent or some sort of up keeping. Not only will this enable you to have some more money, it will also enable them to begin to understand this value. Due to this, it may also be advisable to help the young person to obtain a job in their teenage years and stop purchasing the luxury items for them, or cut them down in provisions.

Charging the young person a rent or upkeep allowance may seem a little unfair at first, however, it will enable the young person to begin to understand this budgeting system. It will also give the allowance for the person growing up and eating more, although this should be in the parent’s budget as the child progresses.

Young children can also be taught the idea of budgeting by delegating a certain task and allowance to them. This could be buying something for the house. This could result badly to start with but with sufficient supervision the child can be easily taught how they are able to make the money stretch and go further. This is a great initial basis for the understanding of the value of money and can be used to build a great foundation as the child progresses.

Should you wish, you could also show the child through the tax returns and things like that if the child has developed enough. You could also have a small conversation about your wages and the amount that you are taxed by. This will be beneficial to apply the idea after the initial small budgeting has been given to the child. This will again allow the, to see the value of money and bills that have to be paid by demand.