Tagged: budget fix

Budgeting 101: Budgeting for Kids

It is very important that we start implementing budgeting for kids at an early age. In my household, we have been overhauling our budget and getting more focused and dedicated to planning and properly utilizing our income. We all know kids don’t really care about budgets. They see things, they want them, they expect their parents to come through to make it happen. This is why I felt the need to focus on budgeting for kids. What if we challenged that paradigm and taught our children the value of budgeting and choosing what to allocate your money towards?

In the posts “How to get your Budget in Check” Part 1 and Part 2 we set the groundwork for gaining control of your finances through purposeful strategies. Here, we want to include the whole family in our budget endeavors. We want to focus on teaching our kids about budgeting. Because after all, the family who budgets together stays together…..(I totally just made that up).

teaching kids about budgeting, teaching kids about money

Set the example

Firsts things first, you have to be the change you want to see. Your kids look up to you for everything in their lives, budgeting should be no different. If you want to teach your kids good money habits, you should have good money habits. In no way am I saying you should be perfect, but you should have good habits and tips to share. More is caught than is taught. If your children see that you are not frivolously spending money, they are likely to follow in your footsteps. Be transparent about your money making decisions so they can see that managing money and a household takes both strategies and thought.

Provide Opportunity

The best way to learn is to do. Give your children ample opportunity to earn money and make budgeting decisions. Notice I said earn money (you should not just give them money, just because). When your child has completed their chores or whatever task you have set forth, they can be compensated for their work. This is how they will earn their money,

Allow them to set money goals and work towards it. For instance, If your son wants to buy a new remote control car, help him set a monetary goal and provide opportunities for him to work towards it. Once the goal is met, take him to reap the benefits of his hard work and set the next goal. Goal setting will provide your kids an area of focus for their budget.

Encourage Giving

An important aspect of teaching kids about budgets is giving. Show your children that they should be givers. They shouldn’t keep all of their money to themselves, instead teach them the power and importance of giving. I really enjoy this part because you get a chance to see where your child’s heart is based on who they choose to help. A word of caution here is to not allow them to help mom or dad. Although this is very sweet, encourage your child to be a blessing to a person or organization outside of your household. Important lesson are learned when we are givers and children learn that we can work to earn and work to help others.

Allow Them To Make Mistakes

This one may be the most difficult! As parents, we naturally want to shield our kids from making mistakes. But, who learned to ride a bike because their parents stopped them from falling off? NO ONE! Let your kids make financial mistakes, let them purchase something that is priced too high, let them give away all of their money and have nothing left for themselves. Then, use it as an opportunity to help them learn and grow to make sound decisions in the future. It is better for kids to learn about money and make mistakes while the risks are low than to become an adult making high risk decions with little knowledge.

Dave Ramsey has a great list of how to teach kids about money at different ages. The learning should never stop and should get more complex as kids age. If we can get in the habit of teaching kids about budgeting and teaching kids about money, we can break cycles from the past. We can raise children who are money conscious and well equipped to financially navigate life.

teaching kids about budgeting, teaching kids about money

How do you teach your kids about budgeting?

Keep doing (the best) you boo!

xoxo Lani

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Part 2: How to Get Your Budget in Check

If you are ready and prepared to get your budget in check, you are in the right place. If you are landing here for the first time, I encourage you to check out Part 1: How to Get Your Budget in Check before continuing.

get your budget in check, budgeting | Lani on Life

In Part 1 we discussed the basics of getting your budget in order. Including, understanding your income, identifying your debt, and devising a plan to get your budget in order. In Part 2 we will take it a step further and discuss how to get your budget in check by identifying budget “killers”, executing your plan, and reassessing and readjusting your budget.

Let’s jump in.

Idenitfying Budget Killers

Once you have gotten a clear understanding of how much income is coming into your household, now is the time to identify the things that are killing your budget. We all have our vices and things we like to eat, drink, listen to or do at the expense of maintaining our budget. Automatic reloads on your Starbucks account could be killing your budget. $8.99 per month to an unknown subscription could be killing your budget. Stopping at Wawa every morning before work could be killing your budget.

Your responsibility here is to look over your bank statements with a fine tooth comb and identify the areas where you are spending excess. If you haven’t completed your free budget check up, it may be a little difficult to continue. If you have, it is safe to say your budget killers are the area in which you are spending in excess. Some of those factors we cannot change immediately (such as you rent or car payment), but others we can (entertainment, dining out). When you find the areas you are overspending in, you have successfully identified potential budget killers.

get your budget in check, budgeting | Lani on Life

Executing your Plan

Now that you have identified your income, analyzed your spending, and identified your budget killers, now comes the time to execute the plan. This is where things get rough! No one can make you follow through with your plan but you. What monetary goals have you set for yourself or your family? These are the things that will keep you pushing forward. To make it a little easier, put those goals up in a place where you will see them daily to help remind yourself of why you chose this path.

If you have allocated $20 a week to spend on coffee/breakfast items, I would encourage you to take that out as cash. This helps you to avoid going over in this budget category. We quickly forget how much we’ve spent when just slide that card! Measures like these are the things that you will need to put in to play to ensure you are executing your plan as effectively as possible. If you mess up one day, that is okay. Each day is a new day to get on and stay on the right track. Being in control of your budget does not occur over night.

Reassessing and Readjusting

At the end of each month (or as often as you’d like) you should reassess your budget and adjust as necessary. Many factors cause our budgets to fluctuate, that is why having a budget requires consistent assessing and adjusting. A budget is a living breathing document, not one and done.

To save your sanity, I’d only do this once a month. Reflect on your past month and see where things need to be altered. This does not mean increase categories where you are overspending! This means plan accordingly so you do not. For instance, if I am overspending in entertainment, I may preplan my outings with friends and not accept any additional invitations to events for the month. The power of “no” is your friend when it comes to keeping your budget intact. If you allotted much more to an area and ended with residual funds, you can move that to other areas of need. Neglecting to reassess and readjust your budget, will result in an unusable budget. One that will require you to start anew.

Now that you are all ready to get your budget in check, go out and dominate! Let me know what things you are doing to ensure you are keeping your budget in check and what tips you’d like to see to help you stay the course.

Keep doing (the best) you boo!

xoxo Lani

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