Budgeting for Kids
Just looking for some input on budgeting with my kids. I have set them up with a budget and a few categories. I was wondering what everyone else does.
As it stands now they receive money based on how well they perform on their chore charts. (some chores are non negotiable as they live in the house, but we make ones for them to earn money as well)
We are currently splitting the amounts 50/50 between spending and savings. I have also added a wish farm aspect.
Here is the budget I have set up
That looks like a great tween/teen budget to me. I've been thinking of doing the same for my kids. I might work in additional "life expenses" like car insurance...just a small contribution for them to manage.
Are yours using the app to budget/track? Both of mine have phones and could use the app, but I can't see paying 129/year (x2) for them to use it for such simple categories. However, getting them into the YNAB habit before they're in their 40s like me might be worth it. :-)
My thoughts (two kids 21 and 14)...
1) make sure the kids are the ones setting the actual categories. they need ownership of them.
2) Spending Money -- I'm not sure if Snacks is just an example or what else would go in here beyond saving for Wish List items. Do they have any other spending they need to do on a regular basis? For an older teen, after they've done this for awhile, you might give them some extra money each month that they have to use to buy their own clothes. It's up to your teen if they think of each of these goals as wish list vs spending.
3) Savings, Wish Farm, and Wish List is too much of the same thing, from their perspective. Simpler and fewer categories is better. I'd just stick with the Wish List. The Long-Term Savings should go away and be replaced with a specific goal in the Wish List, like a car or college or first apartment, or a high school spring break trip or something. Generic long-term savings without a specific goal is not something we recommend even adults having using YNAB.... and it's even more ubiquitous to teens. :)
4) You might consider a group called Giving instead of Charity. One of my kids kept wanting to buy his friends snacks at school or help them with their spending. "Gifts for Others" is a good, easy to understand label for most kids. It could be for their friends or birthday/Christmas gifts for their family, or you could break it out into separate categories. However, I find the fewer categories the better for teens. I'd also have categories in that group for whatever they might give to like church or the animal shelter, instead of a generic one named Charity. It might look like this:
Categories: Gifts for Others, Animal Shelter, Church Tithing, Christmas/Birthday Gifts
Obviously just by two cents, based on our experience. :)
I'm considering doing something like this as well. Right now we have a combination of envelopes and small canisters (like what corn meal comes in) that they're keeping their money in. It was getting full of $1s, so I took some 5's, 10's and 20's out of my wallet, and between the 2 of them, I replaced about 75 $1.00 bills with larger denominations. I did this one evening without telling them, and my oldest son almost flipped out when he opened his, thinking it had all gone. I said, "look closely, you didn't lose anything."
Anyway, I'm thinking about opening a savings account or something for them, and might consider using YNAB to help them keep track.
One thing my sister did with my nephews when they were younger was give them very large allowances at a fairly young age (starting in the teen years) and had them be responsible for their own clothes, cosmetics, entertainment, etc. Now they're off on their own, and doing quite well, since they had all those years to learn how to budget for certain things. I think I want to start doing that with my 2 boys as well.
We go a very basic cash-based situation for our kids (10 & 12).
They have their list of jobs to choose from (including a couple of non-negotiables like making their bed), and we use the 3 Jar method. They take their money each week and divide it how they want between Spend (short term, blow it on donuts), Save (usually goes toward Lego), and Give (save for some sort of community-based charitable activity/purchase).
We don't bother with multiple categories at the moment: I feel like one savings goal at a time is plenty for them to focus on. At this stage it's more about giving them the mindset that there's more than just 'money in / money out' to consider.
I have a almost 7 year old and 8.5 year old. They each have their own budget.
This is my son's:
The giving section gets added up through the year and then they choose any charity they want to donate to.
Savings is long-term (college, a car, etc.)
Spending is immediate spending and also longer term purchases they are saving towards like a video game or console.