Self Control is the Real Lesson of Budgeting

Budgeting Cycle

By Jayne Berkaw

“Right now I have enough money to last me the rest of my life – unless I buy something

- Humorist Jackie Mason

Anyone who can relate seriously to Jackie Mason’s quip has never been taught how to budget.  As parents, we have a responsibility to build our children into adults who don’t just cope, but thrive.  A lot of it boils down to teaching them self control in making good daily decisions, including how they manage themselves – and how they manage money.

Everyone has their own approach to parenthood, but there is no replacement for teaching your kids how to thrive by showing them how you yourselves thrive.  Talk to them about the expenses you manage, like mortgage/rent payments, utility costs, phone bills, food and other regular expenses you must plan for each month.  Then talk to them about the “things” you want to have and how you plan to save and pay for those variable expenses.  If you’re saving for a 60” plasma TV, talk it over with your kids.  Explain how much the TV costs, how much you are saving for it weekly and, at that rate, when you will have enough money to make the purchase.

Take the mystery out of the family finances by sharing the basics of the family budget with your kids.  Talk to them when you’re in the store, at the dinner table, whenever a “teaching moment” presents itself.  Then get them started on their own budget through an allowance.

With an allowance, you and your kids can set up fixed “costs” like savings and charitable giving, and variable costs like treats and snacks, toys and movies, etc.  You can allot a percentage of their allowance to each budget item, and you can review progress regularly.  With FamilyMint, you can break savings down into goals like college expenses, computer/technology wants and needs, or even savings for a new bike, video game or snow board.  You can show them how saving a bit more each week will help them reach their goals earlier.  They can move their funds around to make that happen in a colorful, fun virtual environment that will keep them coming back!

You want your children to have enough money to last the rest of their lives, so keep them grounded in the reality of financial limitations and responsibility.