Useful tips
Budgets, savings, expenses. Do your children know the meaning of these words? Are these terms still completely unknown to them?
The 4 following steps serve as a foundation for a budget template your children can follow for many years to come:
- List recurrent purchases
With your children, list recurrent purchases they plan to make every month or year. If there are few or none, ask them to think about purchases they plan on making in the near or not so near
future.
- Understand the cost of life
Ask your children to have a look at the family budget together or to list your main expenses. This exercise will allow them to better understand real expenses while learning to measure the cost
of life. Visualizing the amounts to set aside for expenses such as electricity, gas, rent and monthly mortgage payments puts the notion of savings into perspective.
- Save for a specific goal
Both savings and due date management are essential components of a budget. See Purchase Planning Model and teach them the best way to save on a daily basis.
- Calculate income less monthly expenses
Find a budget template that is in line with your children's reality. Use Model to Plan Monthly Spending.
Your children will also have to learn that they need a savings plan to buy a bike or pay for a trip. They'll have to establish a specific budget for every goal, in addition to their monthly budget.