Kids: their own budget or allowance category?

Do your kids manage their own budgets in ynab or do you put their allowance in a category of your budget?

My son is 7 and his allowance is in a category in our budget, along with the “fun money” categories for me and my husband. My son checks his category at target or whatever to see if he has enough to buy something he sees, so it’s working ok. 

The problem is that he often says he is going to save for some toy (robotics kit, recently) or save up until he has $100 because he earns interest in the money he saves up. Then he spontaneously decides to buy some junk instead. I know that’s what allowance is for and over time he is going to see the benefit of saving, but I cringe anyway. 

I wonder if he would do better with savings and goals if he had his own budget in ynab so he could set categories and funding goals. Maybe this would work better for an older kid? Also his money isn’t in an account of his own or even in cash, it is coming from my account. 

To the point: what’s the best way to use ynab with an elementary schooler to help him take a long view on his money?

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    • Jen
    • Budget Expert
    • Jen_c
    • 1 yr ago
    • Reported - view

    This is a great question! I have an 8-year-old, too, and have the same problem. We don't need any more stuffed animals, and it makes me cringe to bring home yet more of them!

    It has helped (a little) to set up Betterment accounts for my kids. They can choose how much to send to Betterment from their allowance each month, for longterm savings. The 8-year-old chose to send half, and likes to see that build up over time. It's not immediately accessible, which helps with spending.

    I'm curious to see what other folks do for the elementary-age set.  

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  • Both.  My kids (11, 10, 7) share their own budget.  Within it they each have their own categories (some personal, some joint).  They each budget their own allowances.

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    • Having your kids share a budget is really intriguing! What kind of categories do they share and how does it work for them?

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    • Veronica Brashler They share things like their savings goals (they quickly realized that if they all put money into those categories they reach their goals faster).  Birthday presents (for brothers and parents); charitable giving (they all have various opportunities through the schools), and holiday spending (Purim baskets, Chanukah gifts to each other).  They each have their own spending categories as well ("money for myself - name of child").

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    • Sky Blue Tape  I love it! Our kids would group all their money into a Lego category and call it a day 😂

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    • Veronica Brashler And what does my 10 year old say when he's trying to avoid bedtime?  "Eema, we didn't budget our allowances from last week yet, can we budget now?"

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    • Sky Blue Tape It's homework time for us that makes them remember  their budgets! Too funny!

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  • I have two girls and recently decided to start giving them an allowance to teach them to be responsible with money. What I did is create a budget line in my budget for each of their allowances. Their money stays in my account until they want to buy something. I created a separate budget for each of them, I created a manual account called Allowance in their budgets. They get their money to budget every two weeks when I get paid. So I budget the money in my budget, then I go into their budget and inflow the money, they have their own categories set up and can decide what they want their dollars to do. When they spend their money I create a transaction in their budget and in my budget.

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    • Aquamarine Rhythm (46f980513d46) BTW, my girls are 7 and 9. Of the money they get, I put some to long term savings and giving, the rest they get to decide on. It's only been a few weeks since we started, but I figure this is going to help with wanting to buy things when we are out. My 9 year old has a book she borrowed from school that she can't find and she has decided that she wants to use some of her money to pay the fee (I tried to convince her to try to find the book, but she would rather just pay the fine, so I guess since it is her money I really need to just let it go and let her make that decision.)

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  • I wrote more on this in another comment in a different thread but basically I made them each their own budget and started them a spend save and give categories. In the spend gets the every day purchases , the save is like a wish farm where they save for something big and the give they chose a charity to donate to like the animal shelter and children's hospital that we will cash out and deliver when they hit $50 goals. 

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    • Troy Miller
    • Budgeter, FPU Leader, Programmer, Dad, Husband
    • yort
    • 1 yr ago
    • Reported - view

    Up until recently, we've given our kids cash, which they've kept in their wallets. After recent helpful thoughts from others from the other allowance thread, we've decided to switch and give them categories in YNAB. At the moment we're just putting them in our budget rather than give them their own separate one, we'll see how it goes. But aside from the problem of them remembering their dang wallets and/or losing them in the house somewhere, we kinda recognized that they're going to have to learn how to manage their money digitally as well as physically.

    When giving them cash, we had them put quarters in a giving and saving jar. Now we're just going to have those be automatically budgeted sub-categories. I think that will make it a bit more visible, as they can see the numbers going up, and hopefully they will be incentivized to make their own categories to save for.

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  • I think at age 7, cash might mean a little more, go old school envelope system... give, save & spend. Save in this case being for a large purchase or goal they can reach in a few months, so basically saving for a 7 year old is really just deferred spending. Spontaneous junk purchases can only be made from the spend envelope.

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  • Hey Tan Zebra . Great question. There's a whole chapter in the upcoming book on exactly this, with a couple of vigenttes that are similar. So...you're not alone. 😉

    A few un-ordered observations from budgeting with my own kids (who are now 10, 12, and 14):

    Then he spontaneously decides to buy some junk instead.

    In my opionion, this is going to happen and it's a good thing. He's not going to learn that maybe he shouldn't have bought the junk instead, until he tries buying the junk.

    I wonder if he would do better with savings and goals if he had his own budget in ynab

    My kids have their own budgets. They can customize categories, just like you and I do, and set goals that are meaningful to them. The single category in your budget probably makes that more challenging. You can always make it part of the deal something like, You get two goals and I get two goals. That way you can "enforce" a savings goal that feels right for your family, but he can still have the kind of choice that he needs to learn for himself.

    Either way, he's a lucky boy to have budgeting parents!

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    • Todd We would like to set up a YNAB budget for our 14 year old son, as he just got his first debit card and we want to help him learn to use it responsibly. Is there a way we can open another budget and link his account, under our YNAB account? Or would we have to pay for him separately? 

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    • Kim and Brian Rapp You can have multiple budgets.

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    • Kim and Brian Rapp I have a separate budget for each of our kids within our YNAB account. Click your budget name in the top left and select Create a New Budget to get started :)

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  • We give them cash, and they have their own YNAB budgets that they update and budget the money to.

    We choose not to mingle their assets with ours. It gives them a better sense of ownership.

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    • Rowena
    • Young working professional.
    • rowena
    • 1 yr ago
    • 1
    • Reported - view

    As a kid, my dad opened a bank account for me at a local bank with no minimum balance requirement. I got my weekly allowance in cash (all $1 of it), and then could choose whether I wanted to keep it in my piggy bank or put it in the real bank for longer-term savings. Same with Christmas or Birthday money. Then I had a notebook that I used to keep track of my balance, spending, wishlist items, etc. 

    If you want him to be using YNAB, then I would either recommend a separate budget for him, or his own category group. 

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