Showing a very young child how a "budget" works..

[C.Ann]

We will be going to Disney in December and last weekend I was talking to my 5-yr. old granddaughter about "budgeting".. I explained to her that even folks with LOTS of money normally still work off of some kind of "budget".. I had mentioned to her Dad that she be given a "budget" for this trip so she doesn't break the bank wanting this and that..

I told her that she would be having a "budget" for the trip for spending money just like me, Mommy, Daddy, etc.. She thought it was pretty interesting and seemed to understand the idea of once she spent all of her money, that was that..

When I see her this weekend though, I would like to actually SHOW her how it works.. I figured I could use the Monopoly money we have at the lake and have her "buy" some of her toys that are already there.. That way I'm hoping she'll get the concept of buying one VERY expensive item and having little money leftover as opposed to buying a whole bunch of smaller things..

Any other suggestions from you guys? Have you ever did a "test run" with your little ones prior to the trip?

Thanks!

 

[pumpkinfish]

C.Ann,

I am so excited to read this post, and I am about to burst! I love when adults take the time to teach budgeting to young ones. That is a great idea to have her buy her stuffed animals. Maybe you could put prices on the stuffed animals and set it up like a real store with you being the sales lady. Make it fun! Have her play dress up to act like a grown up, and she will feel like one. I think that is very important at 5 yrs old.

Also, take her grocery shopping with you and explain the concept of coupons. I learned a LOT about budgeting growing up because I would always go with my mom to the grocery store. My mom used to ask which was the better deal (I was a little older) ie. What is better, the peanut butter at $3 for 16 oz vs $4 for 24 oz? Those kind of things are invaluable when taught to children.

Ok, one more suggestion. Have her save her pennies, and change. Have her look around the house and tell her she can keep any change in her "vacation jar". Make the jar out of a milk jub and have her decorate it. Anything that will make the jug her own. My grandfather and I used ot walk through their town and pass by fast food windows and find lots of change!

Good luck C Ann. Just know that these things you teach her now, will be seen for years to come.

 

[arminnie]

I took my niece to WDW several years ago when she was about 7. I told her how much money she had to spend. That was great as we spent the time figuring out what she could buy with her money instead of her asking for everything.

She even bought things for her two brothers and thought of others. I was so proud of her.

 

[dmensing]

On a related theme, a great book discussing how to get your kids interested in saving money is "The Bank of Dad: The Best Way to Teach Kids about Money" by David Owen.

I recently picked this up at our library, and found it very informative, entertaining, and easy to read.

Check it out!

Dan.

 

[tink2dw]

Kids need to know HOW to pay the clerk and to get back change and count it, 5 is a little young, but as kids grow this is an important skill.

 

[Strings]

Not really budgeting, but we are trying to teach DD4 about saving. We have 2 change jars going. All of my change goes in one that is going towards the disney trip. Dh collects his change and puts it in her piggy bank. All of that goes into the college fund. DD4 gets 75 cents a week for allowance. 25 cents goes into the piggy bank, 25 into her disney fund, and 25 into her "mad money" She has been really good about not touching her mad money because she knows she can add that to her disney money. We've been doing this for 6 months, and our trip isn't until 12/05. She is very focused on saving for Disney.

We also have a goal chart, so she can see how much progress we make each month.

Btw, DD has learned that if the chores aren't done, she doesn't get the allowance. It happened only once. She reminds me every night that it is her job to set the table.

 

[Cinders]

You might also try to do a daily budget with any unspent money added to the next day. For the weekend say she has $15 per day or $45 total. On Friday let her spend up to $15 then add the extra to Saturday...... If you're going for a week you'll need her to understand that her total amount for the trip $100 (for example) has to last her 7 days. If she wants something costly she may need to take money from more than one day's budgeted amount. And if you are planning on going to any of the outlets try to explain that to her too. We encouraged the boys to check out the stuff at the outlets and then compare to park prices before they started spending any of their money.

Another thing you may do is encourage her to learn to count change.....4 quarters is a dollar..... And how to figure out if she spends $10 out of $15 she'll have $5 left for the next day. A lot to learn but you have plenty of time to work with her before the trip.

 

[Amirah95]

Don't forget to teach her about the change jar. Budgeting and saving go hand and in hand.

 

[CEDmom]

C. Ann my DD is about the same age as your DGD. She'll be 5 in a few weeks and will be starting kindergarten in Sept. We play store a lot at home so she has an idea of being able to only buy things you have $ for. We've been having her use some $ she gets as gifts to buy things she wants for quite a while. It really is amazing how discriminating even a small child can be when they're spending their own $.

One thing we did that worked in DL last Dec was to keep a list of things DD saw and the price as we went into different stores. Towards the end of our trip we went over the list with her and discussed what she had $ for. We even went back to look at a few things and upon a 2nd glance they weren't so enticing to her. We limited her choices to one candy treat but beyond that she was able to choose on her own. The best part is she still plays with those things and remembers she bought them with her own $.

 

[SamSam]

As stated earlier, teaching budgeting to children is something they will use the rest of their lives. When my children were young we would give them a set amount to use for soveneirs during our stay and it was amazing how much more careful they became in their selections. Before we started doing this, it was a constant barrage of 'can I have this?'. What really surprised me was that neither child had a problem when they had used the last of their money; no asking for more money AND no asking 'can I have this cuz I'm out of money'.

 

[crisi]

Unless your five year old granddaughter has great math skills, don't expect too much from her yet. My kids don't really "get" subtraction too good with numbers larger than ten (they are almost five and almost six, but neither has been to kindergarten yet - my almost six year old starts this fall) - so the concept of giving someone twenty dollars for something that costs 15 and having five left over is very difficult. Quarters and nickles and pennies and dimes are also pretty complicated - and the decimal system doesn't make money math any easier. Smaller numbers and amounts they both "get." Its also hard for them to get the concept that if they buy something cheaper they can get something else with the remainder (or save it for something later!)

I find budgeting at this age to work better if we are giving choices - you can have one treat today - a Mickey Bar or candy or a pretzel. You can have it now or you can save it and have it later in the day.

You can buy one toy and one shirt on this trip - you can have the first thing you see, but it would probably be smart to wait until later in the trip when you've seen a lot of stuff and then pick.

Its still budgeting, its just not yet attaching a dollar value they don't really understand to it.

I let kids hand money to clerks and get the change back. They participate in the change jar and get change when they do tasks (but only if they have been good - we use a ladder system at our house for discipline - and in order to work your way up the ladder after you've been naughty, you do chores. At the top of the ladder you get paid for chores). They know money buys things, hear that "I don't have money" for that, know that we work to put money in the bank and the cash machine is not a magic endless supply of money - but the math part we are simplifying way down for at least a few more months.