Teaching your child the value of keeping a budget is an important step in her path to adulthood. But managing money can be a challenge for children who struggle with math, organization, concentration and other learning and attention issues. Here are some ways to teach your child to manage her money wisely.
Figure out a budget.
A budget is a record of the money you earn, spend and save. The basic rule: Don’t spend more than you have. Here’s an approach your child can follow to figure out a budget. If she has trouble with math, she may want to use a calculator. Some calculators can read aloud the numbers, symbols or operation keys you press.
- Add up earnings. First, get your child into the habit of sitting down with a notebook each day to record the amount of money she earned. This might be from an allowance, babysitting or an hourly wage from a job. If she has an hourly wage job, make sure she calculates her take-home pay.
- Add up spending. Below her earnings, ask her to add up all her spending for the day. This includes money she spent on food and drink, movies and entertainment, apps and games, and other things. It also includes bigger weekly and monthly expenses she might be responsible for, such as gas money and car payments.
- Subtract spending from earning. At the end of a month, have your child subtract the total amount she spent from her take-home pay. If she’s earning more—that’s great. If she spends more than she earns, she’ll need to decide where she can cut back.
If your child has trouble spending less than she earns, she can create an allowance for herself. Using different envelopes, she can set aside money for each of her necessary expenses and her savings. If there’s money left over, she can set an amount to spend on fun things. Keeping most of her earnings at home may help her stick to her budget. It’s also important to look for patterns in spending. Budgeting apps and online banking tools can help your child keep track of what she’s spending money on and when.
“Teaching your child not to spend everything she earns right away is essential to her getting ahead.”
Set a savings goal.
Teaching your child not to spend everything she earns right away is essential to her getting ahead. Help your child set up a worthwhile savings goal. This goal could be a car, a computer, an educational summer trip or a contribution to college savings.
Help her calculate how much she’ll need to save each month to reach her goal. Whether she sets aside $5 a month or $100, the process will help her learn the value of saving.
Set up a bank account.
Setting up a checking account for your child can help her track her spending and saving. Choose a bank that offers free checking accounts and free or low-fee ATM transactions. Go to the bank together, and ask a staff member to explain how the account works.
Most banks offer online tools to help keep a budget. Automatic payments can help your child keep on track with any bills she pays regularly. And automatic savings can help her stay on the right path to her savings goals.