Budgeting For Kids: How To Get Them Started

When it comes to the subject of budgeting for kids, it’s an important lesson to learn young. With a solid foundation of budgeting basics, your kids will be set up for the real world better than most.

You can also incorporate budgeting lessons into their lives at a young age. Let’s explore some strategies you can employ when teaching kids about budgeting.

Why teach your kids about money?

You might first think that your kids are too young to worry about building a budget. And of course, they won’t be taking over the mortgage payment anytime soon.

Even though your child likely doesn’t have real-world financial responsibilities yet, it’s never too early to learn sound money management principles. A thoughtful financial education can help them create a bright future for themselves.

Think back to when you first learned about budgeting. If you are like many, you didn’t learn the ropes of building a budget until you were out of the house.

Imagine the positive impacts you could have on your child’s future if they start building good money habits now.

A recent financial survey says, more people are budgeting than ever before. Why not help your kid start out on the right financial foot when they leave the nest?

What can kids budget for?

A child’s budget is going to be a lot simpler than your household budget. Although your kids have fewer expenses and income, they can still set up a budget to reach their own financial goals.

A budget for kids could start with a savings goal in mind. For example, they might start saving for a new cell phone or even their first vehicle.

How to teach your kids about budgeting

If you’ve decided to move forward with teaching kids about budgeting, there are several key principles to convey.

But you don’t have to instill all of this information at once. Instead, you can build up their financial knowledge over time.

Here’s what to know when teaching kids about budgeting.

Start talking about money

The very first step in teaching budgeting for kids is to simply get the conversation started.

As you move through life with your children, look for opportunities to open the door to talking about money and how to create a budget for kids.

For example, you might mention at the grocery store that you purchase food based on your budget. If an item isn’t in the budget, no one can put it in the cart.

Or you might decide to give your child an allowance to explore money management topics together.

Explain the value of money

Without an understanding of the value of a dollar, kids will face a challenging entry into the adult world. Instead of letting them venture forward unprepared, consider helping them slowly grasp the value of money. 

A potential exercise to consider is walking around a store with them to see prices for different items. When you head to the store, point out the costs.

Over time, your kids might uncover how much prices vary across the store. For example, they could buy a piece of candy for $1 or a gallon of milk for $4.

But beyond various price points at the store, consider teaching your child the value of a dollar in relation to work.

You could pay them yourself to complete chores or allow them to pick up a part-time job in order to earn their first paycheck. With time, you can tie the value of money to hard work in their heads.

Practice needs vs wants

It’s common knowledge that we live in a society with a heavy focus on consumerism. Although it’s a part of our lives, it’s important to teach your child the difference between needs versus wants.

Essentially, needs are things you absolutely cannot live without. A few might include food, housing, and transportation.

On the other hand, wants are almost everything else. Wants range from an extra candy bar to a brand-new video game.

If your child can make this distinction early, you could save them a lot of pain and heartache in the future.

Help them set budget goals

Budgeting goals are important for any age. But setting money goals is especially helpful when teaching kids about budgeting.

Start by having them brainstorm their biggest money goals. For example, they might want to save $100 to purchase the latest video game.

Once they have their goal in mind, help them determine how much time they have to reach their goal. Nailing down a specific timeline can help them stay on track. Let’s say they want to purchase the game in 5 weeks.

Next, help them set up a budget to hit a realistic version of the goal. In this case, they’d need to save $20 per week to hit their goal. Depending on their situation, they might not have $20 coming in every week.

At that point, they might start to get creative by doing extra chores for pay or drumming up a side hustle like mowing lawns, selling lemonade, or selling items they declutter to hit their goal.

When your child hits their first money goal, the importance of budgeting might really start to sink in. After all, everyone loves it when something goes according to plan.

Make it fun

Budgeting for kids might be a very important lesson. But sometimes, it can be a challenge to keep your kids engaged in the process.

One way is to take advantage of budgeting worksheets. Here are a few options:

Carrie Elle’s Monthly Budget Printable for Kids

The fun colors and relatively basic design make the monthly budget printable a good option. Not only is the printable a useful teaching tool, but it’s also a completely free download.

iMom Share, Save, Spend

With the “Share, save, spend” printable budgeting sheet, the focus is on sharing or giving money to others. The visual tool offers a tangible opportunity for kids to write down the budget based on three general categories.

A lesson in budgeting for kids

When building a budget, kids can have a more simplistic take. There’s no need to break out the spreadsheets.

But it’s useful for a child to divide up their budget into four categories: saving, spending, investing, and giving.

Here’s a closer look:


Teaching kids the importance of saving cannot be overstated. It’s a basic concept for financially savvy parents, and smart savings strategies are the backbone of a bright financial future.

You can advise your children about how to save for both short-term and long-term goals.


Responsible spending is a necessary part of budgeting for kids. Try to work with your kids on setting aside only a portion of their funds for spending.

Within their budget, they can start to understand the consequences of overspending. For example, if they overspend on a new toy, they might not have the funds they need for their next purchase.

Learning the consequences of overspending now can help them avoid spending mistakes in the future.


Investing is a slightly more advanced money topic. But if your kid has the basics down, showing them the ropes of investing can be worthwhile.

There are kid-friendly investment apps, like Acorns and the Stockpile app, that your child can use to start building an investment portfolio of their own.

The goal of this lesson is to show your kids how investing their money wisely can push their financial goals forward.


Many parents encourage their children to include a ‘giving’ category in their budget. Within a giving category, the child can decide what charities and causes they want to support.

It’s a way to show children how their money choices can make a difference to causes they care about.

Example budget for kids

Here’s an example of a child’s budget.

Let’s say that your child earns $10 per week through an allowance. One way they could divide up their budget is:

Saving: $4
Spending: $3
Investing: $1
Giving: $2

Of course, how they divide up the funds is up to them.

If they have specific savings goals in mind, they might start prioritizing saving over investing. Or if they are particularly charitable, they might push the majority of their budget towards giving.

But it all starts with how much income they have. Depending on their situation, they might have an allowance, a part-time job, or holiday money from a relative.

You can help them subtract their planned expenses from their income. Walk them through the process of making adjustments to their budget based on their financial goals.

When should you start teaching kids about budgeting?

It’s never too early to start talking about money with your kids.

Although you can get started at any stage, it’s important to keep your lessons age-appropriate. For example, a three-year-old is going to need a much different style than a 16-year-old.

Typically, elementary-aged kids are ready to absorb money knowledge. But you’ll have to determine when your child is mature enough to start building their money management skills.

Budgeting for kids teaches them how to manage money well!

Budgeting for kids can help them build confidence in their money management skills. When the basics are in place, your kid will be better prepared for whatever life throws their way.

After all, personal finance impacts many aspects of our lives. Why shouldn’t we teach our kids this invaluable life skill, as well as others like business skills?

Find even more ideas for sharing finance knowledge with your children by checking out the best money books for kids!

The post Budgeting For Kids: How To Get Them Started appeared first on Clever Girl Finance.

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