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Money Tips for Kids

Our most powerful habits start early. That’s true for making good financial decisions, too. Below, you’ll find money tips aimed at kids. Try these with your children, and set them on the path to financial independence early.

Budgeting for Kids

Have you ever wanted a new bike or an iPod that your parents wouldn't buy? Maybe you really want a car when you turn 16? If you learn how to budget your money now, you can plan to have enough money for the stuff that's really important to you.

Print out our budget sheet and use these steps to set your budget:

  1. List your weekly income - Write down all the ways you get money, and how much you get in a week. Add the money together. If you don't get money every week, make a monthly list.
  2. List your weekly expenses - Write down everything that you buy during a week. Make sure you understand the difference between what you need and what you want. Buying lunch is a need. Buying gum or candy is a want. Try to limit how much money you spend on wants. Write the cost of these things next to the items. Add the costs together. The next part of budgeting involves spending, saving, and donating. Be sure to discuss your plan with your parents!
  3. Set money aside for short-term goals - This money can be used for items that you want but don't have enough money for yet like an iPod.
  4. Set money aside for long-term goals - This money is for things like buying a bike, car, college, or even retirement! You can put money in a jar for savings, a savings account, or invest it with the help of your parents.
  5. Set money aside for donations - You should also set a portion of your money aside for charities. Read the tip about donating to see how you can help your favorite cause.

Steps 3, 4, and 5 are “Other Expenses.” Add these together. Add the total of your weekly expenses with the total of your other expenses, and subtract the total from your weekly income.

If you have money left over, you can put more money into long-term savings or another category. If you have a negative amount, you need to take money away from some area. Try to take money from the entertainment category.

Saving for Kids

Do you have money stuffed away in your sock drawer? Do you get an allowance, birthday money, or money for doing chores like washing the car? If you have money, then you should know about saving your money.

Saving is setting money aside for the future. Saving can be both short-term (saving for an iPod) and long-term (saving for a car, college, or even retirement). It is never too soon to start saving.

You can save in lots of ways. You can save at home in a piggy bank or jar, or if your parents help, at the bank in a savings account. If your mom and dad let you and you have enough, you can even invest in the stock market!

Here’s a quick way to watch your savings grow. Label four see-through jars with "Quick Cash" (for weekly expenses), "Short-term Savings," "Long-term Savings," and "Charity" (for donations). Divide your allowance money into these four jars as you planned with your budget. If you stick to your budget, you can save money for the things that are really important to you.

If you are 6 years old and you put $5 in your long-term savings account every week for 11 years (until you are 18 years old), you will have $3,120! Don’t be afraid to increase your savings plans as you get older and get more money. Just think what you can have if you keep saving!

Just like you set goals in school, sports, and at home, you need to set goals for your money. You should have both short-term and long-term goals. You need to review your budget and decide how much money you have to put towards savings.

Donating for Kids

With money comes responsibility. You already know that you can spend money or save it. You also have the ability to donate your money. Just like you should set a portion of money aside for saving and spending, you should try to set money aside to donate to help others, too.

Pick a cause that interests you, like protecting whales, fighting hunger, or helping the homeless. Then find a charity that works for your favorite cause. You can find these through churches, the phonebook, or by asking your parents to help you check on the web.

Check to see that most of the money you donate will actually go to help the cause of your choice, and not just for running the charity. You can also donate money to your church to help with ministries, everyday operations, and their own charity events.

Even if you don’t have money to donate, you can still help your favorite cause. Here are other ways you can help:

  • Learn, and talk about it! Learn about your favorite cause and talk to your friends and family about what you learned.
  • Volunteer - If your cause is in your area, you can volunteer your time to help. For example, you can help out in your local soup kitchen making food for the homeless.
  • Write Letters - You can write letters to government officials, newspapers, or community leaders who might be able to help your cause. Tell them why the cause is important and how they can help.
  • Donate Items - If you do not have money to donate, you can donate old clothes, toys, or canned goods (with your parent's permission) to the homeless or the poor.

By donating, your time and/or money, you can make a difference in the lives of others.

Resources

There are a lot of great tools available online for helping kids learn about money. Here are a few we think you might find helpful: