“A Child’s First Budget,” Ensign, Dec. 2002, 65
Parents can help young children begin learning the fundamentals of financial management by implementing a few basic ideas.
To learn how to manage money, a child needs a source of income. For many, this comes from an allowance. Allowances may include money that would be spent on a child anyway. Some suggest parents pay a fixed sum regularly. How much and how often depend on the age of the child and on the family’s circumstances. Young children may do best with a weekly allowance.
Children also need a way to earn extra money. Being paid for jobs at home or around the neighborhood may be your child’s first step toward financial independence. One way to do this is to sit down with your child and agree on a list of jobs and determine appropriate compensation for each. Children are free to do or not to do jobs on the list.
Begin a very simple budget to be used for all income. Tithing should be paid first and should be kept separate from other money. When a child learns to write, that child is ready to begin filling out a donation slip.
Next, budget long-term savings. Open a savings account and help the child make regular deposits. Some parents deposit funds equal to the child’s deposits. These funds are to be saved for future missions or other “grown-up” expenses.
Help a child budget all remaining funds. This might include a short-term savings can or jar where funds can accumulate for items on a child’s wish list. In addition, some funds need to be spent on other people, such as buying birthday gifts. The remaining funds should be spent as a child wishes.
For a child to develop into a fiscally responsible adult takes time. Beginning to budget while children are young can help them grow into confident, disciplined young adults who are prepared to meet the financial challenges ahead.—Jerry Mason, Vienna Ward, Oakton Virginia Stake