Teach your kids to budget (says Mark)
As you know from my TBT post 1 and 2, I so did not deserve to marry Mark. He’s such a catch. One of his lesser known awesome qualities is his gift for financial planning. This, coupled with his heart surrendered to the Lord and his gift of giving, has been a great blessing to me and now to my kids.
In 2010 we implemented a budget system for our four kids. Their ages were 3, 5, 7, and 13. We began to give them a monthly allowance equal to three times their age. We provided them with three envelopes each and a spreadsheet with three columns. The allowance wasn't directly tied to specific chores. They are indeed required to do chores everyday, but we haven‘t matched specific chores to a specific amount of money. The allowance has been more about teaching them money management than a reward for a job well done.
When they receive their allowance on the first of the month they sit down with Mark or me and they are required to put some money into each envelope--one for giving, one for saving, and one for spending. We mostly allow them to determine how much can go into each envelope but we sometimes offer a little direction if it’s needed. After they determine where the money is going, they add it to the appropriate spreadsheet column. The columns are then adjusted throughout the month if they take money from one of the categories. Their budgets tend to get a little more complicated as they age, as they develop, for example, long-term and short-term saving goals.
The benefits of teaching our kids to budget at a young age have been many.
- Anytime we’re in a store and they want something all I have to say is, “Well, do you have it in your spending money? If so, go ahead.”
- They value the items they purchase more than they would if we just gave stuff to them.
- They are developing an ability to delay gratification--they can’t have what they want right when they want it. They have to save and wait for their desires to be met.
- Best of all, they are actively participating in giving to others. They each pay a portion of their Compassion kids’ sponsorship every month.
- They have grown great joy in giving. They enthusiastically give their money away to those who are in need. Earlier this fall they presented us with $78 to help purchase our plane tickets to the Czech Republic (that amounts to a couple months salary for them!) and they routinely give money to stop human trafficking and to alleviate suffering. We’ve even cringed/rejoiced as we’ve watched them save up for and buy their friends American Girl dolls and dogs.
- They are learning early that there are consequences to how they spend their money. We do not give them extra cash when they “need” it. We let them ride out the consequences of how they spend (even if they're broke from giving away too much).
- They have challenged us in our own generosity. Because they know their father will provide for all their needs, they almost always give away the bulk of their money. They remind us monthly that our Father is the same way. As Jesus instructed, “Freely you have received; freely give” (Matthew 10:8).
One last tidbit: money management instruction from Mark has evolved as needed. For example, when the girls have earned extra money outside of allowance (either from us when we hired them to do something or from their own entrepreneurial activities) Mark has helped them to reinvest their cash or to spend, save, or give it to something strategic. Additionally, a recent plot of his to encourage them to save more has been a matching gifts program--Mark matches whatever they save dollar for dollar.
It’s true that “where your treasure is, there your heart will be also” (Matthew 6:21). As parents we have an opportunity to shepherd our children into givers who are strategic with the gifts God has given them. It’s a joy to shape their habits and hearts early. Their hearts will indeed lead their budgets.
These handy dandy file holders are now used as the girls' budget category envelopes.
Here's an old budget example. Spreadsheets make Mark so very happy.