Budgeting  101 for Kids!

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Let’s face it, kids love to spend money!  The problem is that there is disconnect in the minds of children between the efforts it takes to earn money and the ease of hand to spend it.  That divide can be fixed if we take the time to teach kids about the value of budgeting. 

Education:

Today’s lesson is to teach kids about the value of Budgeting using Practical Money Skills’ Marvel Budget Blaster.  It’s important for kids to understand that unless you are Warren Buffet, money is a finite resource that must be used wisely.  This week they want the new Xbox, next week they want the new Air Jordans, and so on.  The problem is that parents have failed to paint the yellow brick road for them. The yellow brick road conjures up the journey that Dorothy took in the Wizard of Oz. In reality, parents travel that yellow brick road everyday and it’s called their JOB.  Kids don’t often see the work involved with to earn the money, so they don’t see it as a limited resource.  In the last few decades, we have moved from a cash society to a credit/debit card society.  Though that transition has made it more convenient for parents to consume and do personal banking, kids see the card as an unlimited source of money to make them happy.  Today, we will shatter their little perception and teach them how to prioritize the things they want with the money that they have.  Kids must learn the difference between two very important terms, disposable income and discretionary income.

Discretionary income – The amount of an individual’s income that is left for spending, investing or saving after taxes and personal necessities (such as food, shelter, and clothing) have been paid. Discretionary income includes money spent on luxury items, vacations and non-essential goods and services.

Disposal income –The amount of personal income an individual has after taxes and government fees, which can be spent on necessities, or non-essentials, or be saved.

Marvel Budget Worksheet

 

Resources:

Marvel Budget Worksheet and Resources – See Action Step below.

Important terms from this lesson:

Term

Definition
Budget An estimate of income and expenses.

 

Action Step:  Introduce the Marvel Budget Worksheet to your kids

  1. Click the link to download the Marvel Budget Blaster.
  2. Sit down and talk to you kids about budgeting and help them to complete the form for the month of March.
  3. If you need a little assistance, watch the video with your child – How To Build A Budget