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Every month, we focus on one area of personal finance. To celebrate Financial Literacy Month, we’re going all out by providing lots of support and resources around BUDGETING!
This is the first of two blog posts this month that will discuss budgeting. Be sure to check back halfway through the month for more information and pointers that will help your kids grasp this concept.
Last month we focused on interest and why it’s crucial to save money in a bank. As our customers learned, interest helps your money grow! But it’s important to take a step back and think about how you’re going to start saving that money you’ll put into a savings account.
Why should everyone budget? This overview is a perfect way to start the conversation with your youngster about what a budget is and why it’s important:
Budgeting helps us all understand where our money goes. Now that kids understand the “why,” let’s dive into the “how.”
This worksheet offers a quick way to list out all budgeted and actual expenses and income. Work with your kids to complete the middle column on “Actual”.
This is a great start for setting up a budget. If you don’t know what you currently have coming in and going out, it’s harder to set up a budget. The end goal is to have your kids be able to answer questions like, “Am I eating lunch out too frequently?”, “I get this much money of allowance each month,” or “Do I buy a lot of apps and computer games?”
Help your kids to complete this worksheet over the course of several weeks or a month. Many of the rows many not apply, but feel free to add in rows that are needed.
We have these activities available in hard copy form at Young Americans, so come in with your kids for a visit to pick them up. April is a great time to set up a personal budget so that going into the summer months, you can hold them accountable to their budgets.
In Part 2 of this Budgeting Concept blog post, we’ll help you with the next steps. We’ll provide resources for having your kids set savings goals and provide tips to be smart about sticking to a budget.
Tell us below how your budgeting exercise is going. We love your feedback!