Learning how to budget has many benefits. It can help you today while also setting you up to build positive habits for a successful financial future.
MSUFCU Vice President of Marketing and Communications, Deidre Davis is here today to give some tips on how to teach children budgeting basics.
How can children learn about budgeting?
Teaching youth about budgeting begins with earning their own money. There are many opportunities for children of all ages to earn money including chore allowances, hosting a lemonade stand, dog walking, and more.
By earning their own money, children can better understand its value and the importance of spending it wisely. This opens the door for further learning about money management and topics like budgeting.
Now that they’ve earned money, how can they spend that money wisely?
After they’re earning their own money, children can begin to plan out how they’re going to spend their dollars. You’ll want to sit down with them to plan out their goals, wants, and needs while also defining what these different categories mean. Understanding the difference between these terms will help a child realize that not all items they want—like toys—are needs.
Next, you’ll want to talk about spending the money responsibly. This could include the importance of saving or why we can’t spend all of the money on “wants”. Explaining what a budget is and how they may be able to purchase some of their “wants” and save money can give them a tangible example instead of a hypothetical one.
What can adults do to help children set a budget?
To set a budget you can start with your child’s personal earnings and goals, or you can offer further budgeting opportunities. For example, when shopping or running errands, you can give your child a list items needed and a budget. Challenge them to keep the total amount below the budget you give them. Teaching them about different brands, and overall cost will help them actively part take in budgeting and learning how to save!
How can MSUFCU help?
April is Credit Union National Association Youth Month. Throughout this month and all year long, MSUFCU offers free financial education opportunities for all ages. With gaming apps, contests, and youth accounts for newborns up to children age 17, we have the resources for every learning level. Learn more about our youth accounts at msufcu.org/youth.