Budget, is not a bad word. It means you have a certain pool of resources and you have to figure out how to distribute those resources so they last as long as you need. If you cringe when you hear the word budget, your child will get that energy from you and feel the same whenever she hears it too. Same with the word ‘save’. You can use phrases like “planning so you have enough,” or for an older child, “distributing resources”.

Teaching self discipline, saving and planning so he has resources (money, toys, video time, candy) for later and doesn’t use it all up at once is important, and here’s how I do it.

• Make sure your child is old enough to understand the concept of time (“next week we’re going to grandma’s”), adding and taking away. At least 5 years old, preferably 6.
• Do not teach budgeting with money. Money issues start early for everyone and you don’t want to attach “scarcity” to money. You want your child to learn planning, saving and distribution of all resources.
• Start with something they value and you, as parent, have to restrict for their own good. Yup, – Video. We call it ‘screen time’. Ipad, video, games or movies are considered screen time.
• If your child doesn’t get screen time try sweets. Be authentic. Do not just choose something to restrict to teach budgeting. Your child will see through.
• Explain that you believe your child is grown up enough to decide when she wants her screen time. You’re only going to tell her how much she gets for the week (you could do it by day too).
• Say 1 hr/ day or 7 hrs/ week of screen time (just an example, not advice). Tell her it can be a 1.5 hr movie 1 day and 30 mins of Ipad time another day, as long as it all adds up to 7 hrs or less per week.
• Keep a chart if you need to or record it in your phone or in your head, after a while your child will get very good at keeping track.
• After he’s been at it for a while, say 6 months or so and doing well with it. Introduce money.
• Whatever way your family decides to distribute money is up to you (allowance, chores, an account with you). It’s not a money question it’s a parenting question.
• Have your child keep a list of things she wants (toys, special clothes or sports equipment).
• Help her value the items she wants. Learning how to VALUE things is a critical life lesson. Look them up online, go to stores and get prices, comparison shop.
• Compare prices of items (expenses) to chores, or weeks of allowance (earnings).
• Give her an account or piggy bank and have her put her money in and keep track so she can see how it grows as she does chores or saves.
• Tie money, time, and work together for your child! You set the table, or save 2 weeks allowance and you can ‘afford’ your favorite toy.
• Follow through is critical to raising a good consumer who understands value. After your child buys something, whether it was on her list or not, ask her if it was worth the chores or saving.
• You’d be surprised how critical your little consumer is and those are the skills you want to encourage.

There are some good children’s apps for saving and spending. In the next couple of weeks, I will have a list of good kids apps for saving.